An investigation has found that Birmingham City Council's (BCC) failed Oracle Cloud migration was due to a series of project management failures.

A number of documents reveal that there was a systemic lack of leadership, with those in charge of the project failing to listen to concerns raised by a number of parties, reports ComputerWeekly.

Birmingham City Council
Birmingham City Hall – Getty Images

The BCC planned to use Oracle Cloud for its finance and HR operations, aiming for a December 2020 launch. This was then delayed to April 2022, which was also missed.

Ultimately, the Oracle project's cost rose from an initial £19 million ($24m) to £38 million ($48m), and following ongoing issues BCC announced in June 2023 that it would have to spend an additional £46.5 million ($58.7m) to rectify the problems that were being experienced.

In September, the BCC issued a Section 114 notice which effectively meant the council was declaring bankruptcy, and an investigation by the Centre for Governance and Scrutiny began to see what went wrong.

In a BCC audit report released in April 2024, councilor Fred Grindrod said that the audit committee was misled, citing correspondence that followed the Centre for Governance and Scrutiny's November 2023 report.

“What this chamber needs to understand is just how serious this is. If the audit committee has been misled, then every single member of this chamber has been misled, a dereliction of duty by some of our senior officer leadership, and this is what has happened to our council,” he said.

ComputerWeekly states that it has seen notes from a BCC manager that point out discrepancies in the council's report to the cabinet published in June 2023, and revealed the key elements of the Oracle system that were failing to work.

That report stated: "Some critical elements of Oracle are not functioning adequately and this failure has impacted primarily upon the day-to-day operations of Finance and HR," including that payments that should be automatic were still being done manually.

It was this report that requested the additional £46.5 million ($58.7m) to fix urgent issues.

The "discrepancies" include that the flaw in the implementation of the Oracle software was known before the system even went live in April 2022.

The manager's notes also show that council leaders were urged to investigate the failure in communications between the program management, steering committee, and members as to why the senior management team was seemingly unaware of the Oracle issues.

BCC went ahead with the implementation despite being aware of the flaws.

An insider, taking to CW, said of how the BCC handled its finances following the Oracle deployment: “We were withholding thousands of supplier payments because we couldn’t make any payments. We didn’t have any direct debits for cash collection. We had no cash collection, no bank reconciliation. When you do a project of this size, you must have your financial reporting and you must have a bank reconciliation system that tells you where the money is, what’s being spent, and what’s being paid.”

BCC, according to the insider, could not produce an account of its spending and budget for the next year because the data was so unclear.

ComputerWeekly further found that in an enterprise resource planning (ERP) implementation presentation given in 2019, the slides showed that Oracle’s bank reconciliation statement (BRS) did not handle mixed debtor/non-debtor bank files. The workaround suggested required either a lot of manual intervention or a platform as a service (PaaS) offering from Evosys, the Oracle implementation partner contracted by BCC to build the new IT system.

This means that knowledge of the issue existed up to three years before deployment.

In November 2022, BirminghamLive reported that several disabled people had been left in debt as a result of the IT issues.

The system prevented direct debits from being paid to people with disability claims, affecting their ability to budget and make financial decisions for themselves. This ultimately caused a number of people to get into debt as they tried to pay off bills whilst unaware that the benefits they were entitled to had never been deposited.

A Birmingham City Council spokesperson told ComputerWeekly: “We recognize that the challenges faced since the implementation of the Oracle system in 2022 have been frustrating, particularly for our finance and people services staff, and ultimately the people the council serves. At the time, we apologized unreservedly to those affected. We have worked to significantly strengthen governance, to understand issues, and learn lessons from what went wrong.”

In April 2024 it was estimated that the manual processes being carried out by BCC was costing the council around £250,000 per month.

DCD has contacted Birmingham City Council to find out if this cost is still ongoing, and if any progress has been made since the council was awarded its extra budget in resolving these issues.