City council rejects inquiry into £130M Oracle IT disaster
(2025/03/13)
- Reference: 1741859707
- News link: https://www.theregister.co.uk/2025/03/13/birmingham_oracle_inquiry/
- Source link:
Birmingham City Council voted down proposals to hold a full independent inquiry into its disastrous introduction of an Oracle ERP system, which "effectively crippled" its ability to manage and report on its finances.
Late last month, a report from external auditors found that the English council's effort to replace an aging SAP system missed the opportunity to stop the go-live for the cloud-based Oracle Fusion system in April 2022, which continues to be unable to produce auditable accounts. Grant Thornton said the project's Steering Committee failed to assess or understand information about the financial impact or the results of user testing before it made the fateful go-live decision.
In an amendment tabled during this week's council meeting, the opposition Conservative Party called for "a prompt, comprehensive, and independent inquiry" to investigate matters excluded from the auditor's report such as "potential non-compliance with legal or regulatory frameworks, possible offences, and any resulting causes of action, including whether the actions/inactions of Executive Councillors contributed to such issues."
[1]
Speaking for the amendment, Councillor Robert Alden, leader of the Conservatives, said the project's failure highlights the problems resulting from when "the administration cabinet delegates to senior officers and senior officers delegate to junior officers and officers below them delegate it to a consultant."
[2]
[3]
"And all in all, no one is taking responsibility," he said.
He pointed out that Grant Thornton's report states the council had planned to monitor progress on the initial project with the deputy leader's ICT Strategy Board, led by an elected council member. However, due to the board's operational nature and the deputy leader's "limited capacity," they stepped away from the roles and elected to get updates from a director of digital.
[4]
"The board that was solely set up and delegated from cabinet to monitor the progress stepped away because it was a bit too much like hard work," Alden said.
However, the auditor's [5]public interest report also warns that from March 2021, "member oversight was strengthened" and that elected members of the Resources Overview and Scrutiny Committee got updates from officials.
Labour councillor Jamie Scott, an audit committee member, told the meeting the report shows that throughout the first Oracle implementation, "there was a culture among senior officers of this council to downplay problems [that] could easily be seen to have misled members of this council from all sides, and it would appear, misled the external auditors too."
[6]Europe's largest council kept auditors in the dark on Oracle rollout fiasco for 10 months
[7]How mega city council's failure to act on Oracle rollout crashed its financial controls
[8]Mega council officers had no idea what they were buying ahead of Oracle fiasco
[9]Mega city council's Oracle finance fix faces further delays
As The Reg revealed recently, Mark Stocks, Grant Thornton Midlands public sector assurance practice lead and co-author of the report, said that [10]auditors could not get into the failing Oracle system after it went live and was not aware of the extent of the problems until a whistleblower contacted them.
Opposing the amendment for an inquiry, council leader John Cotton said he "shared anger of members over those issues of accountability."
[11]
However, the UK government has appointed commissioners and launched a local inquiry to investigate the cause of the difficulties faced by the local authority, including the Oracle project and the equal pay dispute, both of which contributed to the council becoming effectively bankrupt in autumn 2023.
"The local inquiry matters now fall within the directions to this council to which we are still subject. On the issue of the possible offenses, I think this council should remember that this is not a court of law, and that those matters are rightly and properly pursued by the council's legal team," Cotton said.
The council voted to accept the findings and recommendations in the public interest report but rejected the amendment for an independent inquiry into the Oracle rollout.
The council plans to reimplement Oracle Fusion ERP on an "out-of-the-box" basis, rejecting customizations that plagued the initial rollout. The costs associated with both rollouts and remediation work could amount to around £130 million, up from early estimates of around £20 million for the first implementation. ®
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[5] https://www.birmingham.gov.uk/news/article/1537/birmingham_city_council_-_notice_of_public_interest_report
[6] https://www.theregister.com/2025/03/11/birmingham_oracle_auditors/
[7] https://www.theregister.com/2025/02/27/birmingham_oracle_auditors/
[8] https://www.theregister.com/2025/02/25/birmingham_oracle_latest/
[9] https://www.theregister.com/2025/02/03/birmingham_city_council_oracle/
[10] https://www.theregister.com/2025/03/11/birmingham_oracle_auditors/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z9K62HDoPoLikXTPFZJmVAAAAZE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
Late last month, a report from external auditors found that the English council's effort to replace an aging SAP system missed the opportunity to stop the go-live for the cloud-based Oracle Fusion system in April 2022, which continues to be unable to produce auditable accounts. Grant Thornton said the project's Steering Committee failed to assess or understand information about the financial impact or the results of user testing before it made the fateful go-live decision.
In an amendment tabled during this week's council meeting, the opposition Conservative Party called for "a prompt, comprehensive, and independent inquiry" to investigate matters excluded from the auditor's report such as "potential non-compliance with legal or regulatory frameworks, possible offences, and any resulting causes of action, including whether the actions/inactions of Executive Councillors contributed to such issues."
[1]
Speaking for the amendment, Councillor Robert Alden, leader of the Conservatives, said the project's failure highlights the problems resulting from when "the administration cabinet delegates to senior officers and senior officers delegate to junior officers and officers below them delegate it to a consultant."
[2]
[3]
"And all in all, no one is taking responsibility," he said.
He pointed out that Grant Thornton's report states the council had planned to monitor progress on the initial project with the deputy leader's ICT Strategy Board, led by an elected council member. However, due to the board's operational nature and the deputy leader's "limited capacity," they stepped away from the roles and elected to get updates from a director of digital.
[4]
"The board that was solely set up and delegated from cabinet to monitor the progress stepped away because it was a bit too much like hard work," Alden said.
However, the auditor's [5]public interest report also warns that from March 2021, "member oversight was strengthened" and that elected members of the Resources Overview and Scrutiny Committee got updates from officials.
Labour councillor Jamie Scott, an audit committee member, told the meeting the report shows that throughout the first Oracle implementation, "there was a culture among senior officers of this council to downplay problems [that] could easily be seen to have misled members of this council from all sides, and it would appear, misled the external auditors too."
[6]Europe's largest council kept auditors in the dark on Oracle rollout fiasco for 10 months
[7]How mega city council's failure to act on Oracle rollout crashed its financial controls
[8]Mega council officers had no idea what they were buying ahead of Oracle fiasco
[9]Mega city council's Oracle finance fix faces further delays
As The Reg revealed recently, Mark Stocks, Grant Thornton Midlands public sector assurance practice lead and co-author of the report, said that [10]auditors could not get into the failing Oracle system after it went live and was not aware of the extent of the problems until a whistleblower contacted them.
Opposing the amendment for an inquiry, council leader John Cotton said he "shared anger of members over those issues of accountability."
[11]
However, the UK government has appointed commissioners and launched a local inquiry to investigate the cause of the difficulties faced by the local authority, including the Oracle project and the equal pay dispute, both of which contributed to the council becoming effectively bankrupt in autumn 2023.
"The local inquiry matters now fall within the directions to this council to which we are still subject. On the issue of the possible offenses, I think this council should remember that this is not a court of law, and that those matters are rightly and properly pursued by the council's legal team," Cotton said.
The council voted to accept the findings and recommendations in the public interest report but rejected the amendment for an independent inquiry into the Oracle rollout.
The council plans to reimplement Oracle Fusion ERP on an "out-of-the-box" basis, rejecting customizations that plagued the initial rollout. The costs associated with both rollouts and remediation work could amount to around £130 million, up from early estimates of around £20 million for the first implementation. ®
Get our [12]Tech Resources
[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z9K62HDoPoLikXTPFZJmVAAAAZE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[5] https://www.birmingham.gov.uk/news/article/1537/birmingham_city_council_-_notice_of_public_interest_report
[6] https://www.theregister.com/2025/03/11/birmingham_oracle_auditors/
[7] https://www.theregister.com/2025/02/27/birmingham_oracle_auditors/
[8] https://www.theregister.com/2025/02/25/birmingham_oracle_latest/
[9] https://www.theregister.com/2025/02/03/birmingham_city_council_oracle/
[10] https://www.theregister.com/2025/03/11/birmingham_oracle_auditors/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z9K62HDoPoLikXTPFZJmVAAAAZE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
Heads should roll
Anonymous Coward
That much money on a computer system to do EXACTLY WHAT EVERY OTHER COUNCIL DOES
That has to be criminal negligence.
Sack them all the way down the tree.
Hmm ...
Andy The Hat
Let's not have a local investigation into whether there was anything illegal happening within the council structure because:
"On the issue of the possible offenses, I think this council should remember that this is not a court of law, and that those matters are rightly and properly pursued by the council's legal team,"
So, have the council's legal team been instructed to conduct an investigation this with respect to illegalities? It appears not as there has been no local investigation to raise specific legal concerns to be investigated by the legal team. So that's ok then - Procedure 37a subsection 2: "Beware of the Leopard: ensuring one's own arse is well covered before opening the basement door" successfully enacted ...
Has any other project, even some of the gloriously awful military and government ones, actually managed to go 10x overbudget?
Ball boy
Refusing to hold an enquiry does rather give the impression there's something they want to keep out of view. The court of public opinion will^H^H^H^H has already decided that this was an omnishambles of the first order and, I suspect, there's very little trust in the council. Refusing to hold an investigation will only undermine any remaining public confidence.
I'm reminded of what Sir Humphry said in Yes, Minister : only hold an enquiry when you already know what the outcome will be.
Ah, yes, the "opposition"
My local councillor is a conservative. Has only ever replied once in 20 years when I have contacted him about issues.
That was to say "What do you expect with Labour in charge ?".