Birmingham council’s Oracle system debacle results in £216.5 million loss

Birmingham City Council, the largest local authority in Europe, faces a staggering loss of £216.5 million by April 2026 due to complications with its Oracle system implementation, a new audit reveals. The system, which went live in April 2022, replaced an older SAP system and aimed to integrate functions like finance, payroll, HR, and customer management. Since its launch, the council has struggled with significant issues including the inability to file auditable accounts or detect fraud, culminating in the need to revert to a more basic version of the system.

Originally projected at £19 million, the cost of the Oracle project ballooned to £131 million due to extensive customisations that disrupted essential functions such as bank reconciliations. According to a fresh report from the Audit Reform Lab at the University of Sheffield, none of the projected cost savings were realised, forcing the council to write off £69 million of savings for the fiscal year 2023/24, with additional losses expected in subsequent years.

The report, supported by unions GMB, Unison, and Unite, criticises the council for not disclosing these issues to elected officials and the public for over a year. It calls for a public inquiry into the financial debacle, which contributed to the council’s effective bankruptcy following a disclosed £760 million equal pay claim. The report suggests this claim was potentially overstated, and the role of Oracle was underplayed, raising questions about the management decisions during this period.

Image by Tims Talib from Pixabay