meta_id 3212210

HM Treasury released an updated version of the Orange Book, the government's guidance on managing risk in the public sector. The publication builds on the original Orange Book released in 2020 and introduces a new section addressing the risk control framework alongside existing principles-based guidance on risk management. The Orange Book applies to all government departments and arm's length public bodies, including executive agencies, non-departmental public bodies, and non-ministerial departments. The updated guidance is structured in two parts. Part I sets out five main principles for effective risk management: that risk management shall be essential to governance and leadership; integral to all organisational activities; collaborative and informed by best available information; structured to include identification, assessment, treatment, monitoring and reporting; and continually improved through learning and experience. Part II introduces a Risk Control Framework (RCF) consisting of four pillars—governance and management framework, roles and accountabilities, strategy planning and reporting, and standards policies and procedures—underpinned by the "three lines model" of risk management responsibility. The guidance emphasises that public sector organisations cannot be risk averse and remain successful. It adopts a "comply or explain" approach, requiring organisations to either demonstrate adherence to main principles or clearly explain departures in their governance statements. The publication includes supplementary guidance on risk appetite, risk management skills and capabilities, risk reporting, and portfolio risk management. The Orange Book is intended for accounting officers, board members, audit and risk assurance committee members, risk practitioners, senior leadership, policy leads, and programme and project senior responsible officers. HM Treasury has also created an assurance tool in spreadsheet format to support organisations in assessing compliance with the framework's requirements.