Recommendation 5

Government has yet to improve its approach to managing risk or set out which trade-offs it intends to make in future emergencies. The pandemic has highlighted the importance of carrying out robust risk planning and being clear about risk appetite and risk tolerance. Government lacked pre-existing plans for many aspects of its response such as employment support schemes, support for people shielding and disruption to schooling. In the interests of speed, government took decisions which it recognised would lead to an increased risk of fraud and error, including relaxing some controls and streamlining spending approvals. The estimated financial consequences of this are large. Between £2.1 billion and £4.2 billion of employment support payments may be due to fraud and error. Similarly, between £16 billion and £27 billion in loans from the Bounce Back Loans scheme may not be repaid. Government’s decisions on imposing or easing restrictions involve considering a wide range of factors, including health risks with, social and economic risks, yet government has lacked a formal process to balance these risks and decide which trade-offs to make. Government has acknowledged that it needs to strengthen its management of cross-cutting risks and has accepted a recommendation, from the Boardman review, that it establish a cross-department risk management profession and training programme for risk managers. Recommendation: The Cabinet Office should, by 31 October 2021, write to us detailing how, and when, it will implement the Boardman review’s recommendation to establish a risk management profession and training programme and provide us with a quarterly progress update until this has been fully implemented.