Asset Management Plan - Newcastle City Council

Risk Assessment8.0 Risk AssessmentRisk is 'the threat that an event or action can adversely affect an organisation’sability to achieve its objectives and to successfully execute its strategies’ (AuditCommission). A simpler definition might be ‘the chance of something happeningthat will have an impact on objectives’.Risk is part of everyone’s life. Some of us are more exposed to it because of ourpersonalities, activities or environment but we are all exposed to it.Risk is the possibility of loss but not of gain, for example:Health and safetySecurityFireFloodEnvironmentalService InterruptionHowever, speculative risk is dynamic and entrepreneurial and offers a prospectof gain:Political riskBusiness riskFinancial riskCultural riskEmployment practicesThe Treasury ‘orange book’ (January 2001) defines the two types of risks asfollows:direct threats (damaging events) which could lead to a failure to achieveobjectives,opportunities (constructive events) which if exploited could offer an improved wayof achieving objectives, but which are surrounded by threats.8.1 Types of RiskRisks can be classified according to type and to category. This can assist in theoverall management of risk. The Council is classifying risks as Strategic,Operational, Cross-cutting, Statutory and Discretionary.Risks can fall into more than one of these Risk Types. For example, the risk ofinjury to employees is operational in nature, subject to statutory requirementsand cuts across all services.Strategic risks can affect the long-term aims and objectives of the Council. Theserisks need to be identified and managed by Corporate Management Team aspart of corporate planning processes, strategy development and service bestvalue reviews.48