Bill to fix IT system fiasco rises by £45m to £140m
ANOTHER £45 million needs to be spent by beleaguered Birmingham City Council to fix a still-broken IT system.
The news means the council has ended up £140 million on the hook for a project that should have cost no more than £20 million.
The disastrous saga around the implementation of the Oracle finance, HR and services project has been going on for four years but it is still not working reliably, with transactions posted incorrectly and huge question marks hanging over the reliability of the council’s finances.
The extra cash is needed to stabilise and manually correct entries.
A report prepared by Peter Sebastian, the council’s head of financial planning, revealed a further £45 million was going to be needed to fix the problems.
That is on top of the £86 million already spent and the £19.9 million original cost. Mr Sebastian said that since the Oracle system went live in April 2022, there had been significant issues with the processes and interfaces, as well as the system’s ability to produce “meaningful reports”.
Significant difficulties remained around the financial integrity of the finance ledger.
His report said: “Simply put, the system is still posting transactions incorrectly and significant manual work is required to ensure that the finance system is accurate.”
This had led to an extra six-month delay in closing the prior year’s accounts, as the finance team needed to manually adjust inaccuracies in the ledger to ensure transactions were posted to the correct cost centres.
The delay “took up significant finance team resource and meant the production of the 2022/23 accounts were delayed.”
Concerned finance staff earlier told councillors they were “not listened to” as they tried to warn about the catastrophic impact of the system, months before the crisis was made public.
Senior leaders were said to have downplayed the clamour for months around the failings of the Oracle ERP system. Staff were distraught and stressed as a result and some even left their jobs as a result.