Birmingham City Council is still grappling with issues surrounding its Oracle system as 2025 rolls in. During Monday’s budget meeting, concerns about accounting problems surfaced, with the council acknowledging that fixing these issues requires reimplementing the enterprise resource planning (ERP) system.
One councillor pointed out a staggering £380 million budget deficit projected over the next three years, emphasizing that £141 million of uncollected business rates could force a 30% rise in council tax.
The day after the council meeting, the Birmingham audit committee delved deeper. Serious questions arose about the decision to launch the Oracle system when many elements remained unfinished. Mark Stocks, an auditor from Grant Thornton, noted that there was an “optimism bias” leading to this decision. He highlighted that the council lost crucial knowledge after finance officer Fiona Greenway departed, yet suppliers pushed for the launch. “The information was there to stop this, but all the suppliers said go live. The system wasn’t ready,” he said.
Since switching from SAP to the Oracle ERP in April 2022, the council faced major challenges with processes, interfaces, and report generation. Instead of tailoring its operations to the new system, Birmingham tried to adapt Oracle to its existing processes, leading to an incomplete implementation when it went live.
The auditor critiqued the decision to proceed, stating that council officers lacked a clear understanding of the risks involved. Suppliers had provided caveated advice that needed more attention. This included concerns surrounding the bank reconciliation system and the general ledger, with some areas deemed untestable.
Councillor Richard Parkins described the Grant Thornton report as one of the worst he’s seen, calling it a “case study in how not to implement an IT system.” He echoed the astonishment at the go-live decision considering the circumstances.
When asked about testing before going live, auditor Thomas Foster said some testing was done, particularly with payroll, but key areas fell short and didn’t get the focus they required.
The auditors pointed out that the council needs to undergo a business change process supported by technology, with necessary training and upskilling. They stressed the importance of following the best practices offered by the software and committing fully to completing the system design.
Data quality remains a lingering concern. The current system is plagued by poor-quality data, and unless this is addressed, the council risks facing failure again, regardless of how well the system is designed and how well users are trained.
Beneath these technical issues, the need for cultural change at the council was highlighted, with Grant Thornton recognizing it as a key recommendation. When councillor Paul Tilsey raised the question of whether the culture surrounding the ERP project is changing, Stocks acknowledged that fixing the ERP might take time, possibly until April 2026. Until everything aligns, doubts about maintaining an effective financial system linger.