Finance including Small loss Risk Loss of Loss of 0.25–0.5 Uncertain delivery Non-delivery of key claims of claim remote per cent of per cent of budget of key objective/ Loss of budget objective/Loss of >1 per cent of Claim(s) between 0.5–1.0 per cent of budget Claim less than £10,000 and budget £10,000 £100,000 Failure to meet Claim(s) between specification/ £100,000 and £1 slippage million Loss of contract / Purchasers failing payment by results to pay on time Claim(s) >£1 million Service/business Loss/interruption Loss/interruption Loss/interruption Loss/interruption of Permanent loss of interruption of >1 hour of >8 hours of >1 day >1 week service or facility Environmental impact Minimal or no Minor impact on Moderate impact Major impact on Catastrophic impact impact on the environment on environment environment on environment environment Table 2 Likelihood score (L) What is the likelihood of the consequence occurring? The frequency-based score is appropriate in most circumstances and is easier to identify. It should be used whenever it is possible to identify a frequency. Likelihood score 1 2 3 4 5 Descriptor Rare Unlikely Possible Likely Almost certain Frequency This will Do not expect Might happen Will probably Will undoubtedly How often might probably never it to or recur happen/recur but happen/recur, it/does it happen happen/recur happen/recur occasionally it is not a possibly frequently but it is persisting issue possible it may do so Table 3 Risk scoring = consequence x likelihood ( C x L ) Likelihood Likelihood 1 2 3 4 5 score Rare Unlikely Possible Likely Almost certain 5 Catastrophic 5 10 15 20 4 Major 4 8 12 16 20 3 Moderate 3 6 9 12 15 2 Minor 2 4 6 8 10 1 Negligible 1 2 3 4 5
Finance including claims Small loss Risk of claim remote Loss of per cent of budget Claim less than £10,000 Loss of 0.25–0.5 per cent of budget Claim(s) between £10,000 and £100,000 Uncertain delivery of key objective/Loss of 0.5–1.0 per cent of budget Claim(s) between £100,000 and £1 million Purchasers failing to pay on time Non-delivery of key objective/ Loss of >1 per cent of budget Failure to meet specification/ slippage Loss of contract / payment by results Claim(s) >£1 million Service/business interruption Environmental impact Loss/interruption of >1 hour Minimal or no impact on the environment Loss/interruption of >8 hours Minor impact on environment Loss/interruption of >1 day Moderate impact on environment Loss/interruption of >1 week Major impact on environment Permanent loss of service or facility Catastrophic impact on environment Table 2 Likelihood score (L) What is the likelihood of the consequence occurring? The frequency-based score is appropriate in most circumstances and is easier to identify. It should be used whenever it is possible to identify a frequency. Likelihood score 1 2 3 4 5 Descriptor Rare Unlikely Possible Likely Almost certain Frequency How often might it/does it happen This will probably never happen/recur Do not expect it to happen/recur but it is possible it may do so Might happen or recur occasionally Will probably happen/recur but it is not a persisting issue Will undoubtedly happen/recur, possibly frequently Table 3 Risk scoring = consequence x likelihood ( C x L ) Likelihood Likelihood score 1 2 3 4 5 Rare Unlikely Possible Likely Almost certain 5 Catastrophic 5 10 15 20 4 Major 4 8 12 16 20 3 Moderate 3 6 9 12 15 2 Minor 2 4 6 8 10 1 Negligible 1 2 3 4 5
5.MCCG%20Risk%20Management%20Policy%20March%202016.docx