The Learning and Skills Councils Annual Report and Accounts for ...

8. In 2008–09, the LSC failed to
properly manage the pipeline of
college rebuilding applications
compared to the funding available
(see below). A significant amount
of senior management time and
effort was required to mitigate
the effects of this during the
past year. The LSC was also in its
final year of existence as a result
of Machinery of Government
changes and hence in the process
of transitioning its approximately
3,200 staff to the YPLA and the
Skills Funding Agency, including
transferring some 745 staff to
more than 150 local authorities
and other government bodies.
In April 2009, the National
Apprenticeship Service was also
formed as a separately managed
organisation within the LSC by
means of an internal selection
process for some 400 posts,
creating significant shortages of
resource in the rest of the LSC.
9. These events were occurring at
the same time that the LSC had
quickly to transform itself. This
required a significant change in
the nature of the structure and
accountabilities of a very large
organisation, moving from nine
independent regional organisations
to a national structure with much
more central oversight. Finally, as
a result of the merger of DIUS and
BERR, the Government decided to
make a late change to the Skills
Funding Agency’s organisational
structure by involving Regional
Development Agencies in the
determination of what adult skills
were to be funded. This required
new ways of working to be
developed and a further transfer of
staff at a late stage.
10. Any of these factors would
represent a significant risk;
taken together, they amounted
to an unprecedented level of
difficulty and risk to the effective
delivery of the LSC’s main
operational functions.
11. In the event, the very difficult
college capital issue was effectively
managed (as set out in the
section on college capital funding,
below); the LSC was restructured
and continued to manage its
other programmes; the National
Apprenticeship Service was created
and achieved a significant increase
in the number of Apprenticeships;
the shadow YPLA and Skills
Funding Agency were set up, and
both launched smoothly on 1 April
2010; and, finally, the transfer of
staff to other public bodies was
achieved.
12. During all of this, despite some
fairly close calls, there were no
material operational failures
and the LSC continued to work
towards and achieve – or exceed –
its various government targets.
Capacity to
handle risk
13. Traditionally, in order to deliver
on the ambitious goals that
government set for the LSC,
the LSC’s risk appetite was
considered to be high, including
risks to the LSC’s reputation. The
organisation sought to manage
and mitigate identified risks but in
its 2008–09 Statement on Internal
Control the LSC recognised
that risk management needed
improvement. In more recent
times, when the environment
changed, the LSC’s ability
to manage risks became yet
more constrained.
14. The LSC had an established risk
management policy, which was
refined and enhanced during
2009–10.
The risk and
control framework
15. A national risk manager, through
a director, supported the
management of risk across the
organisation. Each business unit
and region had an appointed
senior manager to act as risk
champion. These managers did
not own the risks but acted as
stewards of the process. Guidance
required consideration of risk
management to be a standing
agenda item for all senior
management teams, including the
LSC’s Management Group.
16. In 2008–09, as was demonstrated
by the college capital funding
difficulties, this process was not
strong enough to deal with the
changed funding environment and
did not lead to timely recognition
of the need to adapt our structure
and ways of working to a new
and much more difficult world.
Significant change was needed and
the key steps taken to achieve this
in 2009–10 are set out below.
17. Identified key risks had an assigned
senior owner who was required
to evaluate and manage them
appropriately. A balanced response
was encouraged, whereby the cost
of control was weighed against the
likely impact of a risk becoming
a reality and the estimated
consequences if it did. Guidance
was available via the intranet
and ongoing advice and support
were provided.
34 LSC Annual Report and Accounts 2009–10