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Housing Forum Partnering Toolkit Working as a Successful Partnering Team

Assessing and Managing Risk

Objective and verifiable information on property conditions and customers' needs should be used to guide or test early decisions. This is a crucial stage also for establishing a Gateway Approval System to review the project at key stages in its progress from start to finish. The Gateway process is vital to the active management of budgets, programmes and risks.

Risks need to be addressed and managed continuously throughout the whole project cycle. Risks are always changing and therefore need to be recorded and monitored. Integrated teams can deal with risks more effectively and the earlier risk management starts the better the outcomes will be for all parties.

Construction is a high risk business and poor procurement leads to inadequate risk assessment and management. Risk can be broadly identified as uncertainty of outcome. Risk is inevitable and whether it has a negative or positive impact depends on when it is identified and how it is allocated and managed.

It is worth bearing in mind that many unmanaged risks tend to fall back on clients in one way or another. So clients should be proactive in their approach and manage risks right from the outset of a project.

The three big risk headings are:

Whole project risks

At one level there is the question of project viability - the key decision to invest now, later or not at all... Is the investment appropriate? ... Should the long term risks of ownership be transferred to another organisation?

Construction risks

Once investment is agreed and project gateway systems are established the focus will inevitably move towards the second area of construction risks. Choice of partners, building systems, materials and facilities.

People risks

Because of the sensitivities of working on occupied homes there are huge risks around customer satisfaction to be managed. This has significant implications for clients and contractors in terms of time and money.

Risk management involves:

• Identifying and assessing the risks in terms of impact and probability
• Establishing and maintaining a joint risk register, agreed by the integrated project team
• Establishing procedures for actively managing and monitoring risks
• Joint management /agreement about allocating risks
• Reviewing risks throughout the project cycle
• Controlling risks by planning and containment
• Giving risks to those best able to manage them

Barriers to change can be overcome by:

• When the decision to invest has been made it is important to start risk management planning as soon as possible because decisions take at this stage can often some avert the biggest and most expensive risks.
• The earlier the whole team is appointed the better the risk management process will be. Contractors, consultants and other key suppliers bring knowledge and experience of construction, delivery and related financial risks. This knowledge will be helpful in moves to mitigate and effectively manage risks.
• Joint risk management workshops with facilitation should be held to identify and price all risks and to allocate them to the appropriate parties to manage.
• The establishment of a project risk register which is regularly reviewed will save time, money and disruption.
• The risk management team should be directly responsible to the project core team.

Examples:

London Borough of Hackney

The London Borough of Hackney and Wates Construction identified savings of £250,000 on the £12million Rogate House Refurbishment scheme during a series of preconstruction risk management workshops on the Nightingale Estate.

View demonstration project.

Housing Stock Maintenance Strategic Partnering Arrangement

The Housing Stock Maintenance Strategic Partnering Arrangement has set out its approach to assessing and managing risk within its Housing Stock Maintenance Strategic Partnering Arrangement.

View demonstration project.