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Civil Contingency Bill

Improved risk management - justifying intervention

Risk awareness provides a vital underpinning to resilience. Currently, risk assessment tends to be a separate activity for each organisation. Often it is a specialist activity geared to hazards for which the organisation as an operator is itself responsible (such as industrial processes) or to risks to the community where the organisation has a functional responsibility (for example, the fire service assessment of fire risk).

To ensure an effective response capability across the local area to all hazards it is vital that the findings and lessons each organisation discovers through its risk assessment work are shared and acted upon by all those with responsibilities for emergency response and preparedness in the area. Information-sharing and co-operation are the foundations of enhanced resilience.

Intervention where possible to reduce risks is common sense.

Expenditure on risk reduction is more likely to fall under existing safety legislation, but - with its focus on planning for prevention of emergencies - the Bill is likely to encourage such initiatives. These can be seen as an investment against future losses (not just financial) when the potential losses outweigh the costs of the actions required. Where the potential risk and losses are calculable, a simple cost-benefit analysis is used to determine whether such investment should be made - as, for example, in constructing flood defences (and these investments may be encouraged by the Bill). Where risks and losses are not so easily identifiable and calculable the emphasis must be placed on building capabilities to deal with a range of conceivable risks and maintaining the organisational resilience necessary to respond and recover as needs dictate. This is where the Bill is directly relevant. It is these types of risks that the local responder proposals are designed to address.

The effects of a disruptive challenge upon businesses and the community can be vast.

Rebuilding work following the Manchester bomb cost around £1bn, most of which came from the private sector, with 250 companies going out of business within 6 months of the blast. Prevention is obviously the key consideration, but so too must be effective preparedness to respond - just in case - to help minimise the devastating impact. Research suggests 70% of organisations experiencing a disaster cease trading within 18 months (Butler Cox Survey). In the real world, it is extremely difficult to demonstrate what the quantifiable value added by emergency and business continuity plans may be. In the case of the Manchester bomb, planning arrangements were in place and may be assumed to have reduced the cost in lives and the disruption to business caused - but no-one would argue that there were not lessons to be learned and various improvements to be made.

Experience and research demonstrate that active intervention can reduce the risks businesses face and the effects of disruptive challenges should they occur. The World Bank and US Geological Survey calculate that economic losses world-wide from natural disasters in the 1990s could have been reduced by $280 billion if $40 billion had been spent on preparedness, mitigation and prevention strategies. The Environment Agency point out that anecdotal evidence from Selby in North Yorkshire shows that about £5million was spent on emergency response during the November 2000 floods and that this expenditure was thought to have saved about £30million worth of flood damage.

Businesses are of course hugely affected by disasters and can reasonably be expected to act themselves to reduce the possible effects of such challenges, rather than simply relying on the authorities. Community resilience envisages each organisation separately and jointly taking responsibility to minimise the effects of disruptions on themselves and their communities. This is why the bill proposes that local authorities should have a duty to promote business continuity management across their areas. Local authorities are likely to pursue this alongside work to assist businesses facing threats such as terrorism or flooding, where many organisations, possibly the whole local community, are affected.

While businesses should work internally to plan for their own continuity, some risks go beyond the capacity of individual businesses to effectively address. Risk reduction then becomes a community-wide concern as such risks can only be addressed effectively in co-operation with other businesses and public and voluntary organisations. The development, or consolidation, of emergency planning arrangements by police forces, local authorities and other responder bodies to address such contingencies will be delivered through the Bill.

The Bill envisages co-operation between the public organisations mainly responsible for dealing with emergencies. It includes in a secondary or co-operative capacity, some businesses which perform functions vital to the life of the community, such as transport and utilities. These businesses are key parts of the local infrastructure which maintain the life of the community. Co-operation is of course beneficial to the companies involved and an essential means of ensuring that vital services can be maintained in emergency situations. The continued ability of the transport companies and utilities to provide a service is of course vital to other businesses that rely upon them for everything from electricity to transporting goods. Thus the Bill encourages co-operation in identifying and managing risk across the whole community.

The Bill aims to improve matters by requiring a systematic and holistic approach that will help ensure that local resources can be used in the most effective and efficient way based upon the risks of emergency identified throughout the local area.