Citizen Today November 2009 Final To Print Revised

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Citizen Today November 2009 Final To Print Revised

  1. 1. December 2009 Reshaping Rebuilding the global economy Looking beyond crisis management government Life at the center for the future Sir Gus O’Donnell on leading the British civil service Home pages Taking stock of housing
  2. 2. Welcome Contents 04 23 Ernst & Young A warm welcome back to Citizen today, Ernst & Young’s magazine for our government and public sector clients around the world. Getting labor working Guiding the global recovery Assurance | Tax | Transactions | Advisory How different countries are responding Delivering a new approach to The state of the economy continues to dominate debate. While some countries have to rising unemployment governance pulled out of recession, job losses abound. And although governments had little option About Ernst & Young but to spend heavily, the resulting debt levels mean that policy-makers still face a Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, difficult task. our 144,000 people are united by our shared The fiscal challenge, matched with continued structural pressures such as rising citizen values and an unwavering commitment to quality. expectations and aging populations, demands systemic changes. Much depends on 06 26 We make a difference by helping our people, our political leaders to drive efficiencies and reduce spending while protecting core Worldwide unemployment trends Rebuilding for the future our clients and our wider communities achieve public services. their potential. Mapping the wide variation in rates Moving from crisis management In this, our third issue, we look at many of these themes. With more citizens turning and developments to strategic planning For more information, please visit www.ey.com. to the state for social security support, we examine how different countries are Ernst & Young refers to the global organization of member firms responding. We have an exclusive interview with the UK’s most-senior civil servant, Sir of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by Gus O’Donnell, about the British government’s response to the economic crisis and his guarantee, does not provide services to clients. attempts to shape public services that respond to citizens’ needs. And we analyze how countries are dealing with the challenge of rising unemployment. 08 29 The Ernst & Young organization is divided into five geographic areas and firms may be members of the following entities: Ernst & Young Americas LLC, Ernst & Young EMEIA Limited, Ernst & Young Far We talk to housing leaders in Canada and New Zealand about housing provision and Delivering 21st-century Vive la Révolution East Area Limited and Ernst & Young Oceania Limited. These entities do not provide services to clients. what can be done to improve the lives of badly housed people. We consider how the government Modernizing the state in France to French government is implementing sustainable reforms to the way it delivers public Sir Gus O’Donnell talks to Citizen today deliver lasting change © 2009 EYGM Limited. All Rights Reserved. services, including the view of the Director-General for State Mordernization. We look about leading the British civil service EYG no. FK0005 at how government and business in the US are working in partnership to address social through change and global recession In line with Ernst & Young’s commitment to minimize its and economic challenges. And in our regular “government and enterprise” feature, we impact on the environment, this document has been printed look at the fast-changing postal sector, with the help of Bruno Chaintron from La Poste. on paper with a high recycled content. 13 32 This publication contains information in summary form and is Please continue to send us feedback about the magazine. We are eager to hear your therefore intended for general guidance only. It is not intended to suggestions and offers to contribute your own experiences and insights. Please contact Preparing for the worst Delivering a better way be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the us at citizentoday@ey.com. How resilience planners of life global Ernst & Young organization can accept any responsibility for should prepare for future Government and business working loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, Olympics and World Cups together to address social and reference should be made to the appropriate advisor. economic challenges in the US www.ey.com Philippe Craig Baker Peuch-Lestrade Managing Editor of 16 36 Global Government and Citizen today and leader Building New Zealand’s Signed, sealed, delivered? Public Sector Leader of Government and Public Sector Advisory Services communities Postal markets respond to EU reform Housing leader Lesley McTurk tells and new competition Citizen today about affordability and the future of social housing in New Zealand 19 38 Creating strong foundations Spotlight on China Citizen today talks to housing chief Karen Introducing Ernst & Young’s Kinsley about affordability, increased government practice in China demand and the environmental impact December 2009 03
  3. 3. Getting Rising unemployment has Almost all European countries have sought to support key industries and have set out plans to Its central bank is now predicting that economic growth will be driven further by increased Efficient processes for policy and strategy formulation that involve key stakeholders are also been one of the primary invest in infrastructure programs to safeguard government infrastructure spending and demand important. One way to achieve this is through the jobs. Germany, Holland, France and Italy all for minerals from China, the nation’s second- use of financial incentives. For example, Holland’s consequences of the global have schemes in place where government largest export market. In addition, Australia’s central government announced earlier this year subsidizes the wages of temporary workers. And single biggest investment project, the Gorgon that €153m would be made available for the labor financial crisis. With many the German federal government has expanded natural-gas venture in western Australia, is Dutch regions to invest in youth employment. programs for older and skilled workers, as well expected to create up to 10,000 jobs when There was only one catch: the regions had to more citizens turning to the as created jobs by increasing the numbers of job construction starts in early 2010. publish their proposals before 1 September state for support, Cornelia placement officers in employment agencies. 2009. This deadline forced the regions to cooperate intensively with their stakeholders to Gottbehüt examines how In the Far East and Australia, there is a mixed picture. China expects its unemployment rate “Policy-makers cannot deliver in time and secure the investment funds. different countries around to hit 4.6% this year, which would be the worst act alone; good policies What’s also clear is that while governments can working since 1980. In response, its Ministry of Human select measures from a vast array of options, it the world are responding to Resources and Social Security aims to create jobs for nine million new urban labourers, five and strategies need to be is important to use a combination of measures in any stimulus package. By doing so, governments the challenge million workers who have lost their jobs, and one million people who are facing difficulties finding supported by excellent give themselves the ability to adjust measures to what are constantly changing circumstances. work. “Improving the employment situation is our top priority and everything we do is aimed at implementation” Central and local governments also should optimize their limited resources by identifying achieving the goal,” Yin Chengji, the ministry’s necessary organizational changes, defining spokesperson, said in a media briefing in October. Based on their attempts to fight unemployment new workflows, developing human capital and And although Japan’s jobless rate in September and facilitate the transition to the economic implementing IT systems. was 5.3% — down from July’s record high of recovery, governments need to be able to We continue to live in challenging times. The 5.7% — according to official figures from its labor react swiftly to market developments. And yet global economic crisis has left governments and ministry, the number of people unemployed was policy-makers cannot act alone; good policies citizens very much on the defensive. But through still far higher than in last year. and strategies need to be supported by excellent the provision of vital social security support, The Australian job market appears to have implementation. Whether the goal is occupational governments can provide very practical support bounced back. Although Australian policy-makers retraining of citizens, creating new jobs or to citizens and the economy at large. have sought to play down the significance, sustaining private consumption, opening up new Bureau of Statistics figures show that 40,000 resources through partnerships is vital. jobs were created in September, mostly full time, For example, in April 2000, the UK’s Department and the unemployment rate fell to 5.7%. This for Work and Pensions began to test a program was the biggest monthly rise in nearly two years, aimed at getting long-term unemployed with an overwhelming switch from part-time to individuals back to work. The department full-time work. commissioned independent providers to deliver The Australian economy has been stimulated employment counselling services in 15 areas by A$20b in government cash handouts to with high unemployment. “Employment Zones” consumers and the central bank’s decision to represented a step change by offering providers About the author slash borrowing costs between September financial incentives to get participants back to Cornelia Gottbehüt is a senior manager in 2008 and April 2009 to the lowest level in half work quickly — and into sustainable employment. Advisory Services with Ernst & Young GmbH a century. The program was successful, significantly raising Wirtschaftsprüfungsgesellschaft. the rate at which jobseekers returned to work. The spectre of increased unemployment has cast its shadow over a great many of the capable of dealing with this spike in demand. The map on pages 6 and 7 demonstrates that official figures from the US Treasury. The trend, however, was nearly a third of the pace of job Assessing four key service delivery drivers will help to identify areas of focus world’s economies in the wake of the global while different countries have adopted different losses of two quarters ago. Increase value for money and do Improve resource allocation and focus on financial crisis. measures, interventions from the state have Although his opponents disagree, supporters more for less your top priorities From continent to continent, labor markets have been widespread. of President Barack Obama contend that the felt the full force of the worst economic slowdown actions taken by his administration have helped As we have seen, the downturn poses How efficient are you? How effective are you? ► Consider outsourcing with payment linked to ► Focus on returning people to work — and keeping since the Great Depression, and more pain is likely to come. An Organisation for Economic “At a time of severe fiscal mitigate the severity of the US jobs crisis. The federal government’s US$787b recovery plan has a significant challenge to existing creating sustainable jobs them there employment and social security ► Switch to low cost channels ► Engage with employers Cooperation and Development (OECD) study released in September reported that by the end constraint, governments deployed federal tax cuts and incentives to try to create and save jobs, expanded unemployment organizations across the world. ► Streamline business operations ► Support unemployed and recently employed ► Introduce shared services Adopting a “business-as-usual” of 2010, 10 million more jobs are expected to have been lost among its member states. This are faced with increasing benefits, and directed spending to social entitlement programs. In addition, federal Ernst & Young ► Build partnerships with third parties service delivery approach will not drive the greater would bring to 25 million the number of job losses in the 30-member group of industrialized demands for social security agencies are using recovery funds to award contracts, grants and loans around the country. sense of urgency that governments Do all your stakeholders view you positively? drivers How well are these managed? ► Dispose of surplus property should adopt. What capabilities support from their citizens” nations since the economic crisis began at the ► Strengthen governance, transparency, ► Reuse technology assets In Europe, meanwhile, unemployment has been accountability end of 2007. rising throughout the euro zone, as well as do these organizations need, and ► Demonstrate assessment processes are fair ► Review all capital programs At a time of severe fiscal constraint, governments in those countries that still use their national where must they focus their efforts? and rigorous are thus faced with increasing demands for Take the US for example. It may be out of currency, such as the UK. The Baltic countries recession, but October was the 22nd successive Ernst & Young believes that there social security support from their citizens, as have been particularly badly affected, as have well as confronted by the logistical challenge of month that unemployment rose, and its economy Ireland and Spain, both of which have suffered should be four primary areas of focus. Improve reputation and trust Improve capital and asset management ensuring that its existing business systems are lost jobs at an average monthly rate of 256,000 from the collapse of their construction industries. Source: Ernst & Young, “Rebuilding for the future”, August 2009. in the third quarter of this year, according to December 2009 05
  4. 4. Worldwide unemployment trends United Kingdom: 2.5m/7.8% The UK’s Office for National Statistics reported that in September UK unemployment had risen to its highest level in 14 years. Alarmingly, youth unemployment rose to a record high Netherlands: 0.4m/5.0% The Dutch government has started a program of part-time unemployment benefit payments. Employers can let their skilled of 19.8%, adding to fears of a new workers work up to 50% fewer Canada: 1.5m/8.4% “lost generation” of young people. hours rather than being laid off, with the time they are not working Although unemployment fell 0.3% made up with a benefit payment. China: 35.0m/4.2% in September 2009, this number is still 35% higher than in October Unemployment in China is 2008. Many economists predict that hard to accurately measure as layoffs in the manufacturing, forestry, the number of jobless migrant construction and auto sectors could France: 2.6m/10.3% workers is not recorded. The Germany: 3.4m/8.0% push the number of Canadian jobless Analysts have warned that Ministry of Human Resources to more than 9% by the end of 2009. even though the economy German unemployment fell to 8.0% and Social Security aims to seems to be on the mend, rising in September 2009, confounding create jobs for 9m new urban unemployment is a serious forecasts of a slight increase. laborers, 5m laid-off workers threat to any recovery as it Government subsidies that allow and 1m people who are facing could sap consumer demand, firms to cut working hours have difficulties finding work. United States: 15.1m/9.8% the key driver of growth. so far prevented a flood of jobless Japan: 3.6m/5.3% claims, but experts warn that September 2009 was the 21st consecutive claims could rise significantly in Many Japanese economists month of shrinkage for the US workforce. Q4 2009 and Q1 2010. believe it is just a matter of time The official figures were far worse than before the unemployment rate economists had forecast, and together with Spain: 4.1m/17.9% tops the current postwar record a drop in factory orders, sent stock markets The OECD predicts the number high of 5.5%. In June, the Cabinet lower and sparked renewed talk of the of Spanish jobless will reach Office annual report put the possibility of a “double dip” recession. 20% of the workforce during Italy: 1.8m/7.4% number of excess workers at 2010. The social consequences Japanese companies during the While the Italian unemployment rate is first three months of 2009 at are already being felt. Protests less than some expected, the number 6.07m, adding that the capability have erupted across Spain as of people giving up the search for of these workers to remain citizens struggle to deal with work has increased. Hours worked in employed under severe business the economic crisis. For some Italy have fallen 3.8% since Q2 2008, conditions is reaching its limits. This map records Q3 2009 commentators, the downturn has been aggravated by Spain’s compared with a fall of just 1.7% in Mexico: 2.9m/6.4% France, and the number of workers unemployment levels in certain labor regulations. temporarily sent home on reduced pay India: 40.0m/9.1% Mexico’s unemployment under the “cassa integrazione” scheme countries around the world. It is clear rate jumped more than has gone up around six-fold since June In India unemployment is estimated at 9.1%, but that rates and trends vary dramatically, expected in September as a crippling recession 2008. Experts expect this scheme will be used less in coming months and the this number is thought with comparisons complicated by ravaged the country’s unemployment rate will rise accordingly. to largely reflect the key exports. While “organized” (official) sector different recording methods. At Mexico’s unemployment of the economy, which rate increased, it is still makes up just 10% of the one extreme, South Africa (23.6% lower than in many other country’s workforce. unemployment) and Spain (17.9%) are industrialized countries. Brazil: 1.8m/7.7% Some analysts say that fighting hard to control the problem. Mexico’s absence of At the start of the crisis, unemployment insurance President Luiz Inácio Lula da South Africa: 4.1m/23.6% At the other end of the spectrum, causes workers to take Silva increased and expanded any available job if they access to social protection, South Africa’s unemployment Australia has 5.7% unemployment are laid off. implementing a series of anti- problem is rooted in its apartheid cyclical measures designed history. Although President and falling rolls, and the Netherlands to safeguard employment, Jacob Zuma has pledged to create 500,000 jobs in 2009 and has just 5.0% unemployed. Globally, assist the unemployed and protect internal consumption. 4m by 2014, with South Africa the International Monetary Fund The Brazilian economy added now in recession after years of steady growth, economists say Australia: 0.7m/5.7% 252,617 jobs in September, and the World Bank forecast that on top of 242,126 in August. the government will have a hard Australia’s unemployment rate enough time saving jobs, never unemployment will not peak until mind creating them. fell to 5.7% with 40,000 jobs created in September 2009, Q3 or Q4 2010. defying international trends and stunning financial markets. Source: Data and intelligence has been drawn from national statistics on employment, OECD, IMF, and the World Bank, and economic media. December 2009 07
  5. 5. Delivering 21st-century government As head of the British civil service, Sir Gus O’Donnell works in partnership with the Prime Minister and leads an organization of 500,000 people working across the UK. Here, he talks to Matt Mercer about his role, what he has learned from around the world and his attempt to shape a civil service that is responsive to citizens’ needs December 2009 09
  6. 6. Delivering 21st-century government Every Tuesday morning British Prime As the global downturn took hold, Sir Gus was able to draw on his outdated — it’s still essential but it’s very much just one element. And in Minister Gordon Brown and his secretaries of background in economics. Having studied the subject at the University of many countries, the Department for International Development — known state meet in Number 10 Downing Street for Warwick and Nuffield College, Oxford, he spent four years as an economics as DFID — is also working in new and innovative ways to reduce poverty and their weekly cabinet meeting. lecturer at the University of Glasgow before he finally joined the UK’s playing a more and more important role in how the UK operates overseas.” Always sitting to Brown’s immediate right is Treasury ministry as an economist. Earlier in his career Sir Gus had two stints working in Washington, DC. In not a senior minister but Sir Gus O’Donnell, “In some ways you think you spend your whole life preparing for something 1985 he joined the British Embassy to serve in the economics division for the cabinet secretary and head of the UK home like this because I have a very Keynesian economics background,” he says. four years. In 1989 he became press secretary to Nigel Lawson, the British civil service. His placement at these meetings “For us in the UK, we had a big role to play by hosting the G20 Summit in chancellor of the exchequer in London, before transferring to fulfil the same underlines the importance of his role. He and his London in April. I remembered my economic history of the response to the role for Prime Minister John Major for another four years. Between 1997 civil service colleagues support the government Great Depression and all the things that went wrong there — the conflicts and 1998 he returned to Washington to serve as the UK’s executive director of the day in developing and implementing and the fact there was a G66 meeting which went on for a month and it to both the International Monetary Fund and the World Bank. its policies, as well as in delivering the UK’s accomplished little. The G20 for a day and a half was tough enough!” public services. And yet Sir Gus insists that participating in cabinet What was it like? “It was fascinating. Getting the G20 leaders together with the heads of international organizations was crucial, as they all realized “It’s very important to learn about best is not the best part of his job. “What I like best is seeing the great things that civil servants do in that they had a common purpose. We have, I think partly as a result of the summit, had various regions of the world starting to turn around already, practice from public services around various contexts, helping the most disadvantaged groups and working to improve public services,” he particularly in Asia. Personally, for me, it was tremendous because I was able to meet people like President Obama and talk to him. He was incredibly the world” says. “One day it could be seeing people working on impressive and very, very good at helping to solve problems and moving one of our best services, such as the car tax system, things on.” “Having had two spells in Washington I learned a lot,” he says. “It was which is an incredibly efficient online and telephone With the London 2012 Olympics on the horizon, hosting such a big event incredibly personally enriching and is one of the reasons I always say to service. And then another example is when I visited was a particularly useful experience for the UK. “As a logistical exercise it people here. “If you want to get on, get out.” I was there in the mid-1980s, Kabul, in Afghanistan, seeing our civil servants there was something else,” Sir Gus says. “I think people didn’t realize how big the Reagan years, and it was fascinating to see the growth in popularity operating in incredibly difficult circumstances to try to an event G20 is because there are rather more than 20 representatives of supply-side economics, but also to see the center of gravity moving improve lives.” there! But in terms of outcomes it was a great success and it has led on somewhat to the west, going to places like San Francisco and San Diego. Sir Gus’ large wood-panelled office, deep within the Cabinet to Pittsburgh, and now we will have G20 meetings in Canada, Korea and Seeing the focus westwards, rather than eastwards, was really interesting as Office building in Whitehall and overlooking Horse Guards then France. So I think what it has done is cement the G20 process as the it was the early days of the growth of China and India.” Parade, is exactly what you’d expect it to be — imposing and key international economic forum, and this is a big achievement and a Now, as cabinet secretary, he still seeks to pick up as much as he can from humming with the activity that comes with life at the very big change.” regular trips abroad. “It’s very important to learn about best practice from center of government. But, since taking on the role in August public services around the world. America’s ideas on opening up data were 2005, Sir Gus prefers a down-to-earth approach — no old- really interesting, for example. fashioned mandarin is he. “Getting the G20 leaders together with the “We are doing something similar on www.data.gov.uk which is where we are It was from this base in the Cabinet Office — a short walk down a rabbit warren of corridors from Number 10 — that he has heads of international organizations was opening up non-personal data for other citizens to reuse. This is to increase transparency, empower people to help improve public services and stimulate spent much of his time working on the British government’s response to the global economic crisis. crucial as they all realized that they had a economic growth. In one case, we released data on where cycling accidents occur. Within 48 hours of it going online, cycling user groups had planned “Trying to sort out our economic policies on what continues to be common purpose” alternative routes. So this generated real value to the user — cyclists in this case. The state didn’t have to pay any money — all we did was put the a really, really unusual global downturn has been challenging,” he admits. “But, again, you see great rewards when organizations like raw data out there and people used it to their best advantage. The idea of our JobCentre Plus agency are putting more people into jobs than The UK civil service is structured into three organizations. There is the home finding ways for other people to use the material we can publish, in a world you would ever have expected, given the scale of the fall in GDP.” civil service, which Sir Gus heads, and two other administratively separate where we may be stretched in terms of resources, is a really good one.” civil services. One is for Northern Ireland, the Northern Ireland Civil Service, And what about other countries picking up lessons from the UK’s civil He is also keen to stress that it’s at times of crisis that the civil and the other is the Foreign Service, Her Majesty’s Diplomatic Service. service? One key area of interest has been in the UK’s capability reviews, service’s values of honesty, impartiality, integrity and objectivity The heads of these services are members of the Permanent Secretaries Sir Gus’ flagship reform, which systematically assess the organizational really come to the fore. These values were first put forward by the Management Group, reporting to Sir Gus, who says the system works well. capabilities of individual departments and publish results that can be Northcote-Trevelyan report of 1854, which was the foundation of a modern civil service that aimed to be efficient and non-partisan, “It’s quite permeable. In the old days you would have seen an embassy compared across departments. The five-member review teams for each recruiting on merit through open and fair competition. or high commission as fundamentally being there to promote our foreign department typically include two senior civil servants from outside that policy, but this has now changed. When I went to India recently, I saw department, two members from the private sector and one from local “I have made a big push on values,” he says. “And one of the highlights how our high commission operates as a platform for British government. government. In response to weaknesses identified in its review, each for me is that the House of Commons is shortly going to be voting on There were people there working on things like commercial issues, inward department must draw up and follow an action plan to ensure that it can legislation that will enshrine these values into law — 150 years on from investment, science, and economics — people from a whole range of meet the challenges to its current and future delivery. Northcote-Trevelyan. These things are the bedrock of our civil service.” departments. So the idea of embassies just focused on foreign policy is December 2009 11
  7. 7. Preparing Delivering 21st-century government “We’ve had an enormous number of delegations come for the worst and talk to me — all wanting to see if we could find ways of benchmarking their performance against other countries,” says Sir Gus. “I’m very pleased that I started the reviews Resilience planners for Olympics and World Cups must not merely straight away because I think it takes a while to come hope for the best, says Jay Rebbeck. Prioritizing resources, rigorous through, but we’re really seeing the benefits of constantly looking at trying to improve. To me, it underlined the training and planned coordinated responses are all crucial elements importance of the need to professionalize the civil service and to open it up. The weaknesses we found were in areas that help reduce the risk from emergencies like finance, HR, commercial procurement and IT, but we’ve improved dramatically. This has been pushed by the capability reviews, but departments have also responded by bringing in external experts, which has worked really well. In the long term, we want to grow more of our own talent, but right now I don’t think people realize how open we are — about 30% of our senior staff we bring in from outside.” “I think 10 years from now there will be a lot that is different in terms of pace and professionalism” Looking to the future, Sir Gus predicts that the civil service in the UK will look very different. Already very diverse when compared to the private sector — the proportion of women in the senior civil service has almost doubled over the last decade — this trend is going to accelerate even further. “We are already majority female and we’re on track to be majority female in the whole of the senior civil service by 2020,” he points out. “In the FTSE 100 the number of women directors is 11% but we’re at just over 33% — three times as good.” The civil service will also continue to professionalize, he predicts. “A lot of our big processes will be about putting more services online and making them more accessible. This will inevitably mean we will be somewhat smaller. We will be much more focused on outcomes, much more focused on making sure that we can measure how the public feel about the services we are providing. At 4:30 a.m. on 5 September 1972, five terrorists from the Black September faction of the Palestinian “So I think 10 years from now there will be a lot that is Liberation Organization climbed over a two-meter fence into Munich’s Olympic Games village. After different in terms of pace and professionalism. There will meeting with two insiders with security access, they used stolen keys to enter the Israeli team’s be a lot more pride and passion in what we do. But what apartments. Two Israelis were killed in the initial struggle and nine were taken hostage. After relocating won’t change will be that we will continue to operate on a to a nearby airfield, the crisis ended disastrously later that day when a failed rescue attempt left all the bedrock of traditional values. So we have to keep the very hostages, one German police officer and five terrorists dead. best of our traditions, but at the same time move towards This was without doubt the worst terrorist incident any modern Olympic Games has had to face. It more pace and more professionalism.” continues to act as a reminder to the host organizers of major international sporting events for the need to contingency plan against terrorist attacks, as well as other potential ‘nightmare’ scenarios that could happen. Forthcoming international sports events include the Vancouver Winter Olympics in February, next summer’s World Cup in South Africa, and the London 2012 Olympics. In 2014 Brazil will stage the World Cup and Russia will host the Winter Olympics, and the Olympics are headed to Rio in 2016. The organizers of all of these events face the same challenge — what resilience preparations should they have in place, and how can they maintain business continuity if a significant emergency or incident threatens the event? December 2009 13
  8. 8. Preparing for the worst Assessing the strategic context and risk factors in the year after 9/11, there was a marked decrease Putting plans into practice example of a resilience investment delivering benefits The environment in which today’s resilience planners in the numbers of Americans traveling by plane and a In preparing for an event, it’s critical to train and test long after the event, which is a useful lesson for other work is more complex than in the 1970s. Every sporting corresponding increase in road travel. resilience plans is critical. Typically, the highest-priority organizers to learn. event is unique. The first step in resilience preparation is scenarios are tested through full-scale training events and When resilience scenarios strike, command and control Resilience planning to comprehensively understand and assess the local risks lower-priority scenarios are tested through “tabletop” structures need to be in place to act as the surveillance that could threaten the event. Once high-consequence risk scenarios have been simulations. The Athens Olympic Games Security Division and decision-making hub that coordinates the response. identified, they must be translated into effective plans. held seven major drills before the 2004 Games, including These are typically secure rooms deep inside government, For example, the attacks on the Sri Lankan cricket team This begins with the design of the events themselves. A simulations of a chemical attack, a plane hijacking and with pre-determined protocols for which department in Pakistan in March this year highlighted the increased key security lesson of the 1972 Munich hostage crisis an epidemic outbreak. South Africa’s training regime or agency will take the lead in any given scenario. The likelihood of terrorist attacks on sporting targets. Massive was the need to physically separate athletes from the has included testing of air and maritime defenses and importance of locating these command hubs in discrete, sporting events such as World Cups and the Olympics also public. This was taken on board in Sydney 2000 and by chemical, biological, radioactive and nuclear simulations in resilient locations was highlighted during New York’s bring with them the focus of the world’s media spotlight; London’s 2012 organizers, both of which favor a layered Cape Town, Pretoria, Port Elizabeth and Bloemfontein. emergency response to 9/11. The Emergency Control 4.3 billion viewers tuned into the Beijing Games. High security policy that sees athletes housed in an Olympic Center that was meant to be the city’s main command and modern attendances also put greater strain on host city The importance of training and testing was highlighted by village within the Olympic park. Successively more- control headquarters in the event of a terrorist strike was infrastructures, stretching utility services, transport the Atlanta 1996 Olympic bombing in Centennial Park that stringent checkpoints need to be accessed to enter the located on the 23rd floor of the World Trade Center. systems and emergency services alike. And resilience killed two and injured 111. The FBI was critical of Atlanta’s Olympic village. plans for all these scenarios need to be financed during resilience response. Systemic failures in the process Crowd safety also needs to be built into the physical design Facing the future the worst economic downturn in living memory. delayed police responding to a warning call, and they of the venues. The importance of building structurally could not clear the park before the bomb exploded. More Today’s resilience landscape is complex. Every event is Prioritizing risks sound venues was highlighted by the Heysel disaster in comprehensive training and testing would have arguably unique, and risks have to be assessed locally. A second Assessing the local risks affecting a sporting event will 1985, where 39 people died as a result of a collapsed highlighted these system issues. wave of pandemic flu in the northern hemisphere would generate a very long list of potential risk scenarios. stadium wall. Numerous other football disasters (including give the Vancouver Winter Games a major problem. With a However, with limited resources to respond to these Peru in 1964, Hillsborough in Sheffield in the UK in 1989, Reliable intelligence sharing and response coordination UK general election looming, London’s resilience planners scenarios, the risks need to be carefully prioritized. This Ghana in 2001 and Johannesburg in 2001) point to Reliable security intelligence needs to be gathered and will find short shrift if they start pushing the GB£600m is typically done on the basis of their relative likelihood the need to allow fans overspill space (onto the pitch if shared among key departments and agencies before resilience envelope. Sochi’s planners in Russia already versus their relative impact. The UK government uses this necessary) to avoid crushing and for stadia to have rapid and during the event. The German security operation for know they need to massively increase their energy supply approach to prioritize the risks posed to the whole country evacuation protocols in the event of an emergency. This the 2006 World Cup was a prime example of effective for the Winter Games in 2014 — at current levels the event by accidents, natural events and malicious attacks. includes having all-seated stadia, wide exits, and gentle security intelligence gathering and sharing. The National would drain 80% of their total available energy. slopes running away from the stadium. Information and Cooperation Center in Berlin tracked Spectators want to feel completely safe when they attend It is important that resilience planners of major sporting events use this rational prioritization of risks for two Resilience plans need to cater for the additional staff, 6,000 unruly trouble-makers and received thousands of an Olympics or World Cup, but citizens don’t want to see reasons. First, the trade-off between likelihood and impact equipment and vehicles needed in and around the venues. tip-offs by coordinating closely with police, Interpol and spiraling resilience costs that they know they ultimately throws up results that are not always intuitive. Although This includes extra security staff and police officers, more the Central Sports Intelligence Unit. will pay for. Given limited resources, organizers have to be a nuclear attack would cause far more devastation than a firefighters, more medics, and increased numbers of police Robust health-intelligence gathering is critical to monitor ruthless in how they choose to mitigate risks. This means cars, fire engines and ambulances. To pay for all this, prioritizing how resources are focused, putting rigorous About the author gun attack on a crowded iconic venue, the latter scenario and contain communicable disease outbreaks caused resilience budgets have surged. For example, the Athens training and testing regimes in place and delivering Jay Rebbeck is a senior is far more likely. It is therefore a higher priority in terms by food poisoning, bioterrorism or emerging epidemics. 2004 Olympics spent just over €1b for their security coordinated resilience responses. But even with all this, manager with Ernst & Young of resource allocation. Second, this approach forces us Sydney’s Olympics organizers spent three years LLP. He has nine years of to assess likelihood rationally — something that humans campaign. A major lesson has been the need to ring-fence developing an extensive infectious disease surveillance ultimately sporting organizers never want their resilience experience, the last five as a are not very good at. This is because the “recency effect” an appropriate resilience budget. While London 2012’s system for the games. Fortunately, there was no outbreak plans to see the light of day. They would swap the best strategy advisor to the UK’s often gets the better of us. We tend to assess scenarios as planners have so far stuck to their GB£600m budget, in communicable diseases during the games. However, plans in the world for one ingredient — good fortune. national and local government. more likely if they have happened recently and less likely Vancouver’s organizers have spent more than five times the comprehensive surveillance system was a success However, luck has a peculiar habit of favoring those who when they haven’t happened for a while. For example, their initial budget of US$175m, and are now on course to that also created an excellent health legacy. This is a great don’t depend on it. spend US$900m. December 2009 15

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