Birmingham City Council’s IT chaos as costs soar to £109m
Fixing Birmingham’s City Council’s IT system will cost a total of £109m, according to a report from auditors at Grant Thornton.
Costs with the plagued Oracle programme have rocketed from £19m to around £109m, despite the cabinet believing an additional £46m would fix the urgent issues in June 2023.
Auditors say the council will not have a functioning finance system for another year. For more than two years, the system has been unable to produce reliable results or account for cash and income without significant manual impact from the finance team.
In its report on the value for money that Oracle has produced, Grant Thornton said the risk to implement the solution “was not properly understood”.
Fundamental weaknesses were found in both the governance and management of the programme, that were never “effectively remedied” and were hampered by “high turnover of staff in both senior and operational roles”.
When looking to implement the system, the council didn’t equip itself with sufficient in-house skills, leaving it overly dependent on contractors and suppliers.
Overly optimistic mitigations obstructed staff’s key messages, feeding into a lack of transparency that misled senior stakeholders. Senior offices and supply staff also faced conflicting priorities to stay within budget, avoid further delay, and protect individual and corporate reputations.
Alongside equal pay issues, the council’s underlying financial deficit, failed implementation of Oracle and continuing issues with the system, are all contributing factors to the council not delivering its 2022/23 and 2023/24 budgets and savings programmes.
Auditors said: “In our view, the governance and programme management arrangements for the Oracle programme had fundamental weaknesses that were never effectively remedied and were further exposed by high turnover of staff in both senior and operational roles
“This meant that when we decision to Go Live was taken in April 2022, the level of risk inherent in the Oracle solution was not properly understood.
“Resulted in the implementation failing at a significant cost to the council, contributing to a breakdown of financial control such that it has been unable to adequately control its finances throughout 2022/23, 2023/24 and into 2024/25. We note that the council is unlikely to have a functioning finance system until 2026 at the earliest.
“It should be noted that the failure of the ERP implementation is a contributing factor to the council’s financial position rather than being a fundamental factor”.
