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Interdepartmental Liaison Group on Risk Assessment Use of Risk Assessment (UK-ILGRA) within Government Departments

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Chapter Two: The use of risk assessment within departments

Methodology

Two questionnaires were sent out to Government Departments. The purpose of the first questionnaire was to find out what Departments did (i.e. how risk assessment was used). The second questionnaire probed what Departments proposed should be done, and explored common ground in rather more detail.

Departments were asked to provide information on how they used risk assessment under the following subject headings:

Development of Policy: ie. where risk assessment is used as an input into policy-making (eg, identifying priorities, allocating resources on the basis of risk);

Within Policy/Formulation of Policy: ie. the mechanism by which others are required to assess risk (eg, through regulation, standard setting, etc);

Application of Policy: ie. application of risk assessment policy to specific areas of work (eg, by enforcement officers, in research, etc);

Internationally: ie. where risk assessment is an international issue (eg, in proposed EC directives, negotiation on common standards, etc);

Approaches to Risk Assessment: ie. what types of risk assessment are used (eg, quantified risk assessment, risk assessment models, individual and societal risk);

Promotion: ie. how risk assessment is actively communicated (eg, internally between divisions within Government Departments or externally through the media);

External Sources of Advice: ie. where risk assessment information is obtained from outside the Department (eg. from consultants, other Departments, etc).

In addition respondents were asked to provide a critique of the way risk assessment was used in their Departments.

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Findings

Table 1 at Annex2 summarises the responses received. However, how Departments use risk assessment has to be seen in the context of the functions they perform eg safeguarding the health and safety of people and the environment or for appraising financial and project risks. This is described below for the Departments which have responded to the questionnaire.

Health and Safety Commission/Executive

HSC/E's role is to regulate risks arising from work activity, ranging from health and safety in factories and farms, through to nuclear installations and mines, offshore gas and oil installations, the safety of the gas grid, the movement of dangerous goods and substances, railway safety, construction, and many other aspects of the protection of workers and the public. A number of Ministers are responsible to Parliament for HSE's activities, including the Secretaries of State for Education and Employment, Transport, Trade and Industry, Health, Environment, Scotland and Wales, and the Minister for Agriculture. The EU has an increasing impact on HSE's approach to regulations.

Regulation of industrial risks involves determining whether a risk is so great as to be unacceptable; whether the risk is so small that no further precautions are necessary; or, if the risk falls between these two states, whether the risk should be incurred, taking account of the benefits or the need to avoid some greater risk - in other words, whether it has to be reduced as low as is reasonably practicable (ALARP). HSE has published4 the philosophical framework (known as ToR) it uses for deciding which risks fall into the above categories. This is illustrated in Figure 2. It is a mixture of cost benefit-based and equity-based criteria.

The horizontal line at the top represents an upper limit above which a particular risk for practical purposes is regarded as intolerable whatever the benefit. This is HSC/E's view - which may be overridden in the wider National Interest by a public inquiry or expressed decision of Government. Any activity or practice giving rise to a risk greater than this threshold would be ruled out by HSC/E unless it can be modified to reduce the degree of risk below this level (see para62 below). For example, the importation of certain substances (egß-naphthylamine) into the UK is prohibited under the Control of Substances Hazardous to Health Regulations (COSHH) 1988 and 5 parts per million of benzene in air is the maximum concentration (averaged over 8 hours) to which a worker may be exposed.

For existing risks above the upper limit, remedial action of some kind has to be undertaken irrespective of cost. The threshold has been determined by analogy with high risk industries generally regarded as well regulated and taking account of people's voluntary acceptance of risks in particular situations.

The line at the bottom, on the other hand, represents a lower limit or cut-off point where risks are considered broadly acceptable because they are typical of small risks which do not worry people or cause them to alter their behaviour in any way. Even when incurred they only result in a very small addition to the background level of risks to which everyone is exposed during their lifetime.

In between the two lines is a region where a balance has to be struck and society will tolerate risks in order to secure benefits. These benefits, in return for which society generally tolerates risks, typically include local employment, lower cost of production, personal convenience or the maintenance of general social infrastructure such as the production of electricity or the maintenance of food or water supplies. Society's tolerance of risks, is buttressed by an expectation that people will be told the nature and level of the risks, and confidence that the risks are being controlled as low as is reasonably practicable.

This region, known as the "tolerability region", accommodates people's and society's willingness to live with a particular risk so as to secure social and economic benefits. The concept of tolerability implies that existing control measures should be periodically reviewed to ensure that they are both properly applied and that they take account of changes over time, as for example, the availability of new options for reducing or eliminating risks due to technical progress.

This framework or geometry provides HSE with the basis for justifying regulatory decisions whereby the costs of reducing a risk are judged to be worth the benefits and allows a sensible balance to be struck between the two sides of the equation.

The framework depends of course on the ability to quantify and compare risks in such a way that people, and regulators, can make informed judgements about them.

The HSE has suggested that for workers, a risk of death of 1 in 1,000 per annum should be the dividing line between what is tolerable for any substantial category for any large part of a working life, and what is unacceptable for any but fairly exceptional groups. For members of the public who have a risk imposed on them "in the wider interest" HSE would set this limit an order of magnitude lower - at 1 in 10,000 per annum.

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Figure 2 - Levels of risk and ALARP

thumbnail of figure 2 - levels of risk and alarp

At the other end of the spectrum, HSE believes that an individual risk of death of 1 in 1,000,000 per annum for the public (including workers) corresponds to a very low level of risk and should be considered as broadly acceptable.

Within the tolerability region, HSE often uses existing standards or what is regarded as good practice as a guide to decide the levels to which risks to individuals should be controlled. Where no standards or good practice exist, use is made of CBAs.

When undertaking CBAs, HSE makes use of the value of life figure adopted by the Department of Transport for appraisal of new road schemes. In practice HSC/E apply a higher value of life to risks whose impacts extend seriously beyond those immediately affected (often described in their guidance documents as societal risks).

This is on the basis that, in most large catastrophes, for example, a great deal more than human life is destroyed - for instance, property and political costs are also incurred, including the frequently high costs of restoring public confidence. From a rather different standpoint, it seems clear that the public are very averse to certain kinds of hazards, particularly those giving rise to risks where there is no escape and no warning with no free play for the operation of individual judgement.

HSE has never advanced any official view on what values of life should be adopted for risks of this kind, although in practice it has taken the position that it cannot sensibly be less than three times the amount of the value of life attributed to individual risks.

The treatment of uncertainty is also of great importance in all risk calculations. It leads HSE to the view that the ALARP calculation should be biased in favour of greater safety where risks are considerable and uncertain. Where risks may be near the margin of tolerability in Figure 2, HSE believes that the factor described as "gross disproportion" in case law relating to duties qualified by "reasonably practicability" should apply - ie. more should be paid to avert the risk than would otherwise apply.

The reason simply is that the risk being both considerable and uncertain, it may in fact be beyond the tolerable level, for all that is certainly known.

The approach taken by HSE to regulating and assessing risks is generally open, whether it be on the development of new health and safety regulations, Approved Codes of Practice, standards, Maximum Exposure Limits for hazardous substances or in the licensing of nuclear power installations. Indeed HSC has a statutory duty to consult in the first two cases above, and invariably collaborates closely with industry on the others.

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Department of Transport

The Department of Transport (DoT) is responsible for policy on road, rail, air and marine transport, as well as vehicle construction and use standards. However, day to day responsibilities for regulating civil aviation rests with the Civil Aviation Authority (CAA) for which DoT acts as sponsor. Also, statutory responsibility for regulating rail safety standards lies with the HSE.

Risk assessment is central to the regulatory approach adopted. It is used to decide upon prescriptive legislation (such as seat belts) and enforcement, as well as education, training and publicity. The approach pays significant attention to the perception of risk, which is recognised as playing an important part in influencing accidents.

DoT also uses risk assessment for deciding on investments in road safety. The risk assessment techniques for conducting such appraisals are refined since the risks associated with road transport are generally well known. In its assessment of road transport risks, DoT draws on its considerable knowledge of probabilities of accident occurrence and severity.

Wherever practicable, an assessment is made of the casualty savings from road and vehicle safety policy proposals using a consistent set of explicit values for the benefits of reductions in accident risk. Casualty values vary with injury severity ie fatal, serious, or slight. Average costs per accident (damage to property, police and insurance administration) according to class of road and severity are also taken in account. The assessment is compared with the costs of implementation, including compliance costs. For the regulation of vehicle construction, the use of cost benefit analysis is also well established.

For aviation, the application of risk assessment techniques has been an integral part of aircraft safety regulation's design requirements for 30 years and is now increasingly being used for setting international operational, medical and aerodrome standards through the Joint Aviation Authorities (JAA) and the International Civil Aviation Organisation (ICAO). DOT and CAA are promoting the use of risk assessment and CBA for setting international standards.

For shipping, safety standards are also mainly set at an international level. In the past risk assessment and CBA have not been used extensively in setting standards. However, DoT is concerned to encourage a more systematic approach and consideration is now being given to extending the use of risk and cost benefit assessment techniques in appraising safety regulations. In particular, the Department's Marine Safety Agency is playing an active role in promoting the international adoption of formal safety assessment techniques.

For rail (including the underground), DoT is concerned to see that safety investment is properly appraised. Any new expenditure project which has safety implications is subject to a formal safety case evaluation by the operator concerned including the use of risk assessment techniques.

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Department of Health

The Department of Health's (DH) main policy aims are to promote the prevention, diagnosis, treatment and management of ill health. Responsibilities include advising on the safety regulation of medicines, food safety, environmental hazards and medical equipment. EC Directives and guidelines now have a strong impact on the regulatory controls introduced in the UK in these areas. Nevertheless, risk assessment has a role within DH, particularly in the setting of standards.

Development of DH policies and priorities addresses the possible public health consequences and this involves a process of risk assessment. For example, in " The Health of the Nation", DH sets out priorities and targets which have been derived via a process of risk assessment. However, instead of starting with a specific risk and looking at whether or not it was acceptable, DH's approach involved examining the three main end points of mortality, morbidity and societal costs and then determining key areas for action on the basis of the scope for effective interventions and the possibility of setting objectives and targets.

DH's approach to risk assessment is essentially equity-based, ie weight is given to the rights of the individual and the need to protect the weakest in society. Uncertainty is dealt with by the introduction of safety factors plus, in some areas where this is appropriate, a precautionary principle.

DH has also developed well defined methodologies for assessing exposure to certain hazards and their consequences. For example, for chemical products assessment, laboratory studies identify adverse effects and may identify an exposure level below which they are not observed to occur. A "no observable adverse effects level" (NOAEL) is deduced, with an appropriate safety factor. Where no threshold is deemed appropriate, exposure is reduced as low as reasonably practicable.

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Department of Environment

The Department of Environment (DoE) is responsible for policy concerning a range of environmental areas, including quality of drinking, river and coastal water; air quality; handling, treatment and disposal of solid wastes; toxic substances; and building regulations. Pollution is regulated by Her Majesty's Inspectorate of Pollution (HMIP). DoE makes use wherever possible of the HSE ToR framework and within the ALARP region uses a technology-based criterion known as BATNEEC (best available technology not entailing excessive cost) and BPM (best practical means). Where uncertainty exists, it is generally accommodated through informed scientific judgement and the use of safety factors.

The EU is the main driver in setting standards for water quality. Air quality and the handling, treatment and disposal of solid wastes derive standards from the EU, the World Health Organisation (for air quality only) and domestically. The EU does not usually undertake a thorough cost benefit analysis of its standards and there is therefore little scope for the application of risk assessment.

DoE has taken the lead in co-ordinating the UK response to the UN Sustainable Development Initiative at the Rio Summit. The White Paper 'This Common Inheritance' lists some 450 actions which are in progress. Risk assessment features significantly in establishing the necessary trade-offs required to meet the needs of the present without compromising the needs of future generations.

DoE has published5 and is continuing to develop guidance for industry and Government on how risk assessment and risk management can be used in making decisions about sustainable development. This sets out how risk assessment principles like BATNEEC and BPM can be used to keep risks to a minimum. In practice, these have a similar impact to the ALARP principle used by HSE. As new techniques and technologies are developed, whichever technique provides for minimum harm at the lowest cost will be appropriate. The process is a dynamic one and the estimation of risks associated with a particular operation can also change over time.

A similar regime is adopted in HMIP which makes use of BATNEEC to decide whether to authorise particular industrial processes. Control limits are set but, in addition, discharges have to be as low as reasonably practicable. On occasion this may lead to conflicting goals for industry; for example, HSE may wish to see occupational exposure minimised by dilution and dispersal of a hazardous agent, whereas HMIP may wish to minimise risks to the environment by concentrating and containing the agent. Risk assessment has a role to play in resolving this kind of dilemma.

DoE is also responsible for building regulations in England and Wales, including fire safety regulations for new buildings. In this case, compliance cost assessment (CCA) is used to test whether safety and other benefits (generally assessed in qualitative/quantitative but not monetary terms) outweigh the costs to industry.

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Ministry of Agriculture, Fisheries and Food

The Ministry of Agriculture, Fisheries and Food (MAFF) is responsible for the regulation of risks in agriculture and fisheries as well as food safety, a task shared with DH and the EU. It oversees regulation of food quality, composition and labelling, and hygiene aspects of the production of some specific products, eg. eggs, milk and meat. Use of risk assessment includes both quantitative and qualitative methods. Food safety standards are covered, on the whole, by internationally agreed standards. These standards, generally in terms of tolerability limits based on scientific judgement, set limits for some chemicals in foods. There are no prescribed standards for microbiological organisms, which are mainly controlled by using suitable risk management strategies based on the ALARP principle.

MAFF also regulates for the prevention and control of animal diseases which are, or may be, a significant risk to public health. Where the risks are well known, a risk management approach is adopted, eg. the use of quarantine for some animals, and for commercially imported animals equivalent controls, to control rabies. Other controls are used for serious transmittable diseases like tuberculosis (TB), brucellosis and salmonella. A new disease, Bovine sPONGIFORM eNCEPALOPATHY (bse), Is acknowledged as a possible hazard to humans. However, in the absence of sufficient scientific knowledge to quantify the risk (if any), a precautionary regime has been adopted to control the risk of infected tissue reaching the human food chain.

MAFF is developing a 'decision framework' approach to support its risk management function. This stems from the fact that in order to evaluate the effectiveness of risk management actions it is necessary to analyse their objectives as well as direct and indirect effects. It is also important to take into account the multi-faceted nature of food safety and the complex relations between these facets. For example, safety-related regulations tread a delicate balance between protecting people's health and avoiding the imposition of excessive costs on industry. The rationale behind food safety regulations includes multiple factors such as public expectations, issues of confidence and reputation, consumers' perceptions, uncertainty, and many qualitative factors besides experts' judgements on safety matters. There are also some other fundamental issues which mean that decision-making on regulations is rarely clear-cut.

Thus:

MAFF is trying to take a more systematic approach to managing food risks within a framework which takes due account of the different factors involved and is continuing with research aimed at identifying and developing novel and cost-effective risk management strategies.

CBA is also used as part of policy formulation, although it is distinct from risk assessment. For some areas (e.g. environmental risks) risk assessment needs to be developed to include costs and benefits. For flood defence, for example, MAFF provides guidance to responsible local authorities on choosing options on the basis of CBA. Options are chosen with regard to benefit/cost ratios as well as environmental factors. In other areas, eg. the release of genetically modified organisms, there is no legal basis for using CBA.

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Department of Trade and Industry

The role of the Department of Trade and Industry (DTI) is to promote British industry and trade, and its responsibilities cover areas such as consumer safety, small firms, oil and gas industries, radio-communications, the British National Space Centre, and insurance. As part of this remit, DTI has economic regulatory responsibilities for the promotion of competition and the limiting of monopolies and barriers to trade. The risks addressed vary widely within different DTI divisions: they range from anti-competitive behaviour and mis-spend of public money, to project failure, etc.

The use of risk assessment in DTI is generally informal and judgmental, practised through the use of guidelines, and used for different purposes in different divisions. It is used in particular for the targeting and refinement of legislation and standard-setting and is applied to project failure, ie. the loss of public funds. Qualitative rather than quantitative methods are generally adopted, the object being to ensure that the risk is tolerable, ie. suitably low as measured by qualitative guidelines. Because risk assessment is not formalised, little consideration has been given to uncertainty and residual risk.

Cabinet Office

The Central Deregulation Unit (previously located in DTI) is responsible for the Government's Deregulation Initiative, and has published a Guide to Risk Assessment to encourage the use of risk assessment in policy formulation. Following the Government's decision on 19 September 1995 that risk assessments should be provided to Ministers to assist them in reaching their decision on regulatory proposals affecting business, the Deregulation Unit will be providing further guidance on risk assessment methodology to all departments. Under the Deregulation Initiative, Departments are also required to prepare and publish a compliance cost assessment alongside all UK and EU legislative proposals which may have an impact on business.

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Home Office

The Home Office is responsible for a range of UK domestic issues including immigration, the police, the prison service, forensic science services, and fire safety.

Thus far, risk assessment has only been an implicit part of fire safety legislation - in that fire authorities certificating premises have to decide whether they are of low, normal or high fire risk to determine what fire safety measures are appropriate. However, the risk assessment approach of recent EC directives has resulted in proposed regulations for places of work which will require employers to make an assessment of the risk of fire. The Home Office's Fire Safety Division is therefore, for the first time, using risk assessment as a mechanism for proposed legislation.

The principles of current technical fire standards are still the Post War Building Studies which were developed from empirical knowledge rather than scientific fact. Acceptable distances of travel were therefore formulated on the length of time it took people to leave the building in an orderly fashion. Future guidance will be goal-based and will rely to a greater extent on an overall fire risk assessment of the premises with fire safety measures being proportional to the risk.

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Ministry of Defence

The Ministry of Defence (MOD) exists to provide the military capability deemed necessary by Her Majesty's Government. The Department does not generate legislation, but does need to meet regulations devised by other government Departments, and an increasing number of these call for risk assessment - particularly those which reflect EC directives. MOD has internal systems in place to regulate its compliance with health and safety law and the Secretary of State's policy statement. Like other Government Departments, it is also subject to inspection by HSE.

MOD uses detailed quantitative models within the nuclear and radiation safety areas and has developed criteria which offer tolerable levels of protection in particular situations. Procedures for Control of Genetically Modified Organisms also call for specific risk assessment methods. A less formal procedure is used to estimate maximum levels of risk from explosives storage activities within MOD.

Department For Education and Employment

The Department for Education and Employment was formed in July 1995 by the merger of the former Department for Education and Employment Department. The aim of the new Department is to support economic growth and improve the nation's competitiveness and quality of life by raising the levels of educational achievement and skill and promoting an efficient and flexible labour market.

In the former Department for Education, the scope for risk assessment in the development of education policy was limited, though compliance cost assessments were required when considering legislation which would impact on business. Whilst formal risk assessment is not required for most policy areas, informal assessment such as sensitivity analysis, was used to provide upper and lower bounds particularly on estimated costs. Inevitably there was some liaison with other Government Departments over legislation in relation to schoolchildren eg the Home Office on the proposed new fire regulations, Department of Health on the Health of the Nation Initiative, and the Health and Safety Executive with much of their recent legislative changes arising from the European Union. When more than one Government Department was involved, the use of risk assessment in determining policy would fall to the lead Department.

In the former Employment Department use of risk assessment in the development of employment policy was limited, though compliance cost assessments were undertaken when proposing legislation with an impact on business. However, risk assessment was used widely, though less formally, in the operational functions and as part of the planning process. Although there was no formalised approach to risk assessment and management for programmes and services, a variety of techniques were being used in practice to identify and control risks. These included identifying the risks to programme and service delivery, managing contracts, large projects and IT systems and informing audit priorities and business planning. The Department's financial, human and physical assets have also been subject to risk assessment and management.

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Department of National Heritage

The Department of National Heritage's diverse responsibilities range widely from cultural activities to sport, stadia and recreation. A range of risk assessment techniques are used as appropriate within various administrative procedures.

Inland Revenue

Inland Revenue is responsible for the collection of UK income taxes. Risk assessment features as a management information tool, for example, for information technology (IT) projects and prioritisation of internal audit coverage.

Customs and Excise

Customs and Excise are responsible for collecting excise duties and duties levied on imports. Risk assessment is important in underpinning the targeting of resources to counter perceived greatest risks, eg smuggling.

Overseas Development Administration

The Overseas Development Administration (ODA) manages the British aid programmes to developing countries and to the countries of the Central and Eastern Europe and the former Soviet Union. The purpose of aid is to reduce poverty and to improve the quality of life of people in aid-receiving countries. ODA is concerned to ensure the effectiveness and value for money of aid expenditure in achieving its purpose.

Most aid activities are collaborations with host governments or other agencies and ODA does not have full control over the process. There are numerous threats to aid effectiveness - from unforeseen events, poor local policies and lack of commitment in partner countries, poor project design, faulty executive etc.

ODA tackles risk management at several levels. Some countries may, at certain times, be considered too risky to receive development assistance. In other countries, if there is a danger that aid may be made ineffective because of the policies, institutions and lack of commitment of governments ODA seeks through persuasion and appropriate assistance to overcome the problems. Aid projects themselves are prepared on an interdisciplinary basis using a logical framework approach which identifies the conditions for success and introduces design features needed to mitigate the risks to their fulfilment. Environmental risks, and threats to life and livelihood are among the many risks to project implementation and sustainable and viable operation which may be taken into account.

To assist in the processes of project design and approval ODA is, where feasible, starting to adopt a more formal approach to risk assessment. This provides for assessments of the impact on project success of the key risk factors, and of the probability of their occurrence. Where quantification is possible, it also provides for the calculation of the risk of project failure. Detailed guidance has been circulated to ODA officials on these issues.

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The Scottish Office

The Scottish Office (SO) has a wide range of policy responsibilities covering the interests of most Government Departments. There is no single technique used for the appraisal of risk. In some cases, SO adopts the lead department's system, for example, adopting DoT's values for accidents.

The Welsh Office

The Welsh Office discharges its duties in association with central Government Departments and, in so doing, adopts similar methods to those followed by the lead department.

Updated 2009-10-19