Friday, July 10, 2009

Insurance Company plays Nostradamus as parking Grim Reaper gathers

An insurance company with the ability to foretell the future warns of the problems facing many councils.
The lure of untold riches from the decriminalised parking stealth tax drove many councils to rush hastily into deals with private parking enforcement contractors. Proper controls and scrutiny went out of the window. Contracts not checked, contractors not managed. Legal requirements for lines and signs and Traffic Orders treated with reckless indifference by council officers as the money flooded in. Little scrutiny as motorist after motorist was abused. No statutory body to force them and their contractors to stop. The abuse grew and grew spiralling out of control to the point that reckless indifference, in many instances, became out of control lawlessness. Restrictions enforced in the full knowledge by all parties that they were unlawful.
Now, the Grim Reaper has been spotted and the prediction of massive financial consequences for many councils is becoming a slowly dawning reality.

However, it is not Nostradamus reciting quatrains but one of the world's biggest insurance companies. Perhaps not time yet for 'we told you so ...' but would suggest that council lawyers start brushing up on misfeasance and malfeasance in public office and checking out how much money they may have to refund not to mention the damages for those suffering loss at the ahnds of bailiffs.

Local authorities ‘unaware and under-prepared’ for outsourcing risks, claims Zurich Municipal

Despite local authorities undertaking unprecedented levels of increased outsourcing and partnership activity, senior managers and risk officers feel unclear and ill-equipped to manage the resulting risks, says insurance company Zurich Municipal.
A new report released by Zurich on the issue of supply chain risk in the public sector warns of the “potentially catastrophic” implications on local government services as councils dramatically increase reliance on back office outsourcing and frontline partnership working.

Unveiled at the CIPFA annual conference in Manchester, Public sector supply chain: risks, myths and opportunities calls for urgent action to improve risk readiness in the sector. Without proper management, the potential financial, legal and reputational ramifications for local authorities of supply chain failure — such as supplier cost overruns, data privacy breaches or mismanaged social care contracts — could be disastrous, says the insurer.

A survey of risk managers, conducted in tandem with the report, shows that whilst the majority acknowledge that partnership and outsourced working have generated new types of risk, few are considering non-traditional risks before contracting a partner, changing practices to embrace these risks or amending their disaster recovery or risk management plans. Furthermore, risk managers confess to feeling distanced from the day-to-day management of partnerships and claim the issue needs greater recognition and increased integration at a senior management level, particularly amongst those heading up partnership activity.

Independently authored by David Kaye, an expert in supply chain risk, the report marks the launch of Zurich Municipal’s “New World of Risk” campaign to provide local authority executive leaders, managers and service providers with leading edge advice and guidance about managing risk within the dramatically changing local government landscape.
Local authorities are taking on new roles and responsibilities as well as an outsourced business model that, in many cases, is leading to an entirely new risk profile and serious challenges, notes Kaye.
“Outsourcing a critical service need is so much more than subcontracting and delivery dates,” he says. “It is a process littered with reputational and political pitfalls as well as statutory and legal risk. These risks need to be actively managed, early on in the process, with clear exit strategies and business continuity plans in place. Without imposing this sort of control environment, at a senior level, both the risk and cost of partnerships could spiral.”

Andrew Jepp, head of local government at Zurich Municipal, added: “The recent and rapid migration of local authorities from service providers to strategic commissioners has engendered initial cost and efficiency savings, but also given rise to new risks that could mean higher costs in the end. Outsourcing services or outcome delivery to a selected partner or partners does not automatically devolve contractual, legal or moral responsibilities; if anything it heightens the importance of direct and thorough risk management.”
The report can be downloaded at:

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