£170 Million Tech Disaster Left Birmingham Drowning in Rubbish and Rats
Birmingham council has spent millions trying to fix a botched £170 million IT upgrade that left its finances in chaos and bins piled high with rubbish. The Sunday Times has the story.
Birmingham city council has spent more than £2.5 million employing about 20 people to manually correct accounting errors made by its botched IT system, a freedom of information request has revealed.
Since the accounting team was employed in 2023, a year after the failed system was introduced, they have spent nearly 100,000 hours attempting to manage the issues at the bankrupt Labour-controlled council.
The episode marks the latest nightmare for the council, which in 2023 issued a section 114 notice, effectively declaring bankruptcy, after a second equal pay claim in little over a decade crippled its finances. This month also marks the first anniversary of a bin strike that led to headlines around the world about a devastating rat problem.
The technology upgrade was intended to replace the council’s creaking software with a slick alternative from Oracle, at a cost of £19 million. The system took effect on April 11th, 2022, to disastrous effect and was acknowledged 12 months later to have failed.
The cost of the software upgrade has spiralled to about £170 million including running costs, licensing fees and a budget provision for future problems.
Even “the most basic of financial information from the system” was untrustworthy, Fiona Greenway, the council’s finance director, admitted in a March 2024 report. Council suppliers went without payment, schools were approached by bailiffs over unpaid invoices and debt collection became largely impossible, with some 8,000 problems reported within six months.
Paul Tilsley, vice-chair of the council’s audit committee, said the old software had been deactivated only six days after the Oracle launch, leaving no parallel system to fall back on. More than £30 million in uncollected council tax and business rates were written off in the confusion, according to the Conservatives.
Grant Thornton, the council’s external auditing firm, said the meltdown was not caused by problems with the underlying Oracle system but by staff not accepting “out of the box” specifications. Instead they customised the system, including changing default payment dates to match those in the previous software. Officials “failed to adequately scrutinise available information” and missed important warnings, the firm found in a report last year.
Mark Stocks, Grant Thornton’s head of public sector auditing for Birmingham, lambasted senior leadership. “I’ve never seen this level of failure – if I could go back over all my audit plans for the last 35 years,” he told the audit committee last March. “Every other council in the country can implement these systems effectively.”
Worth reading in full.
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Ehh … so, basically, as shipped the software was unsuitable for the needs of the council and when council employes changed the available configuration parameters to match what they needed, doing hyper-extreme stuff like changing payment schedules, everything fell apart? Or, put into slightly other words, the only problem with the software was that someone actually tried to use it. If the council hadn’t, it wouldn’t have caused any problems, either.
Totally ludicrous statement by Grant Thornton.
Yeah that didn’t make much sense to me
Yeah, but you don’t just pick up a new computer system and run it. You run it in parallel with your old system and compare results, trial it before it goes live. Test it, prove it before you rely on it. It reads as though this wasn’t done by Birmingham council. That’s not the fault of the system is it!
Tell that to senior managers in Norfolk, they bought the same system but ignored staff advice to test with parallel runs because Fujitsu Oracle said they were not necessary
Gullible senior managers. Promoted beyond their abilities
Simple question – was the software supplied as an ‘out of the box’ package or was it labelled as OK for the user to customise? If it was not supposed to be meddled with then the council oiks f*cked it up and should pay with their jobs and be set in stocks every weekend
For a system this complex, before they can go live they’d need to migrate all the in-flight operational data, ensure the new system processes match all expectations, make sure the configuration data (e.g. chart of accounts, critical metadata etc) is migrated correctly, that the new financial operations post to the correct ledgers, and that everyone understands how to perform their existing functions in the new software, then close the financial period/year to get the starting balances for the go live. That all has to go flawlessly, and ideally be tested to exhaustion well before go live. Once the ‘machine’ starts running, it begins to alter the internal data, ledger balances, invoice states, payments, bank accounts etc. The longer this goes on before being detected the more difficult it will be to unpick, especially if you can’t pause the business. Even if they’d left the old system on, and wanted to rollback, it would have been massively out of sync and a nightmare to switch back. It seems to me that go live should have involved a parallel run between new and old systems, which requires everything to be done twice, once per system. It’s a workable option, but the business… Read more »
They don’t know what they don’t know. Clusterfu…
Yes, The Dunning Kruger effect.
But from what has been said, apparently the system did give warnings that were ignored.
From my experience with of IT systems, implementation plays a very important role, done incorrectly it can be disastrous and that is what appears to have happened here. But the article is not detailed so it’s not possible to reach a definitive conclusion, that would take many pages to produce.
Oracle, owned 40% by Larry Ellison and with substantial shareholdings held by Vanguard and Blackrock.
Ellison is best mates with one T. Bliar. Oracle are also being lined up for the Britcard ie digital ID.
Bliar was responsible for the F up that DWP suffered in the early nineties when the computer system was upgraded by Fujistu. Bloody horror story. The technicians doing the switch over admitted our ‘new’ kit was actually secon hand.
That Oracle.
To be fair hux, that’s encouraging news… if they’re involved in the digital ID rollout, it’s unlikely to work in my lifetime!
I’m quite happy for the digital ID not to work at all. What would worry me would be a botched rollout in which the software appeared to be working but was actually throwing up all sorts of erroneous errors and reports, like the Post Office’s Horizon software.
For the application in question, it certainly wasn’t and in any case, if the settings can be changed by users (they certainly didn’t get the source code and changed that), users will change them because that’s the purpose of (graphical) control elements allowing them to do so.
This is just an incredibly lame excuse by someone who only has a very faint, if any, clue about software.
I disagree, RW. It sounds like another example of public sector gold plating. A couple of examples – they cocked up a working smart meter spec (£12billion and counting) and instead of adjusting the EU spec for motorcycle testing so that the tests could continue to be held on public roads, they kept the EU detail and spent £millions on off-road test centres.
Somebody else on here asked about accountability. Until personal sanctions can be applied to those at fault, it’ll continue.
Different conversation. I was referring to blaming users for changing parameters they’re were perfectly entitled and allowed to change. This must not cause software malfunctions. If it does, the software is defective, as it should enforce its own invariants.
“… changing parameters they’re were perfectly entitled and allowed to change …” How do you know that?
Well if they weren’t entitled / qualified their role in the system should have blocked them reconfiguring fundamental parameters… but then again we are talking about a council, so perhaps their role configuration / controls framework was a load of crap as well.
I wonder which one of our wonderful consulting groups ‘helped’ them on this journey… clearly they have some blame to shoulder as well, though no doubt the council would have signed a contract so open you could drive a bus through it…
Because they were provided with the technical means for doing so.
I’m pretty certain it wasn’t some idiot user messing around in a menu on their own initiative. Settings are determined during implementation and then locked down and left the hell alone forever after. See my longer post above. This is a project fk-up that wasn’t caught until it had wreaked havoc with the data. Insufficient testing most likely, but as it’s been in use for a while now the internal system state is so garbled it has created an unrecoverable situation. Hence the army of accountants trying patch things up.
I’ve done a couple of these projects. They’re tough.
The cost of the software upgrade has spiralled to about £170 million including running costs, licensing fees and a budget provision for future problems.
The really scary part of this is that our wonderful rulers – government, politicians, civil servants – think they should be micro-managing our lives.
And that they still consider the incompetent scum at Fujitsu as a supplier even though they are complicit in corporate manslaughter.
I take my own trash to a collection point in the County I live in. Can people take their own trash to the dump there?
Why should you? Are you paying council tax?
In short, history tells us:
Public sector + Big I.T. project = Disaster
And yet the government wants more and bigger I.T projects. As part of their plan to save the planet.
Public sector + Big I.T. project = Disaster = equals increased profits for the software company who generally have to fix the mess + big bungs to whoever signed the council contract, which go up on every variation order.
And was specifically low-balled to win the bid, knowing they’d recoup massively on changes, given these orgs total lack of project scope control…
As any subpostmaster will tell you.
BTW Horizon was also from Fujitsu.
See also the College of Policing which was sponsored by the Home Office. Accounts and annual report to 31 March 2024 were not published until 2 July 2025. It is 176 pages long. The report by the Comptroller and Auditor General was heavily qualified because accounting records were deficient. The Registrar of Companies had published a notice to strike off the College of Policing (ie to dissolve it) on 3 June 2025 for its failure to file accounts. Despite this the CEO stated in his report “I confirm that the overall governance and internal control structures have in general been appropriate for the College’s business and worked satisfactorily during 2023/24.” Auditors were unable to obtain “sufficient appropriate evidence” for Revenue of £26.4 mn, staff costs of £52.8mn, property plant and equipment £37.6mn, trade and other receivables £15.3mn and trade and other payables £26mn. Further details of the deficiencies are shown in the audit report. The Companies Act 2006 repeats what has long been required of UK companies “386 Duty to keep accounting records (1) Every company must keep adequate accounting records.” At 31 March 2024 net assets were reported as £36,615,000. In the year a loss of £44 mn was incurred which the Home Office… Read more »
My interpretation is:
…they had reasonable expectations of the continued fleecing and abuse of downtrodden taxpayers, aided and abetted by whichever self-serving scum was in government at the time…
Correct 👍
But I bet Labour will win the council seats again. Because Birmingham is now a medieval city, mostly populated by medieval background people who dont mind filth.
From what I’ve read, it looks like the Independents may take Birmingham?
But, the rest stands…
If you have ever worked on Oracle financials, and as the council would not have wanted to change its practices to fit the standard functionality, that is a marriage that will always end in disaster and divorce, if you have a limited budget. The council will have had a internal team that would be totally inadequate both in their understanding of the existing system and the tech they were moving to. To get that consultants are hired, with no understanding at all of the existing systems and some understanding of the Oracle functionality. It takes months and month of scoping and design, usually which will be thwarted the the CFO and senior accountants who wish to retain their micromanaging roles, without which they will be exposed as total nonentities and useless at managing their department. ON top of that the reporting to the CEO will be clouded by the CFO protecting himself and the CEO will be as useless as the CFO in understanding how everything works planning for the future change. It is change management that causes the projects to fail not the software. Councils are full of rejects and incompetents at the highest levels, elected councillors are generally… Read more »
I’ve been involved in a few of these projects. They’re definitely extremely tough even with competent users.
Nail on the head 👍
One correction – the best of the elected councillors are well meaning incompetents, few in number, the rest are fourth division gangsters.
You’ve clearly been there, and done that… amazing the levels of incompetence there are hidden is orgs.
I think the crazy push for AI will also fall of a cliff once it starts recommending things like ‘fire the CEO’ or ‘half the board don’t know their arses from their elbows – demote them’… it’s only a matter of time
Is this a situation whereby forensic accountants should be picking and sifting through everything or is that what is already occurring?
One obvious element that is missing – or lost – in this and oft far too many such incidents, is accountability. Who is / are / were accountable?
Who is responsible for the blatant waste, of the mismanagement and loss, of public monies? Monies raised locally and those dished out by successive incompetent governments?
Who is responsible for the sheer despair of the townspeople – people who ‘pay their (unfair) dues’ and yet, time and time again are let down?
Who has not / is not doing their job – either through incompetence or indifference – because after all, it is only ‘other people’s money’ they are signing off and wasting?
Who / which individuals are / were ultimately responsible?
Who is not fit for purpose?
What punitive measures are going to be taken against those responsible – and when?
Norfolk County Council also drunk the Kool Aid Fujitsu Oracle were handing out, but after Birmingham because Oracle said Birmingham had it the managers assumed it must be ok. They also ignored staff and did minimal testing before signing it off as working in April 2022. There were no parallel runs because Oracle said they were not needed ( aka would have shown up the errors).As a result staff in finance have been left with big headaches every month trying to work out what exactly is in the system and the reports to do so are woeful. A number of articles in the local paper confirm many staff were not paid on time at the start.
Labour Council for decades. ‘Nuff said.
Yep, having worked on IT projects for local government on the client side you have to be flexible to make it work. Obviously low IQ individuals in charge demanding changes so they keep working in the old familiar ways with not a thought to the cost. Wonder who they were and who appointed them. Did any get the sack?