Title

FINANCE

Rowley orders Birmingham finance review over chaotic IT contract

A Government-imposed governance review of Birmingham City Council has been expanded after massive failures in its accounts IT system emerged.

A Government-imposed governance review of Birmingham City Council has been expanded after massive failures in its accounts IT system emerged.

Last week, it materialised that the £19m costs of an IT and HR contract, which was supposed to streamline the council's accounts, had ballooned to nearly £40m.

The Oracle contract – due to be delivered in December 2020 – is unlikely to be up and running until next year. Currently, the council's payment system is in chaos, with the finance department unable to track who owes it money.

According to sources close to Birmingham, it is thought that up to 100,000 transactions for 2022-23 could have been affected, with a further 2,000 new transactions a week going through the failing system.

Now local government minister Lee Rowley has stepped in and demanded the Whitehall governance review planned for the troubled council's housing and special educational needs and disability services be extended to cover its finances too.

The IT system was commissioned as part of the council's transformation plans and was supposed to cut £16m in spending. However, the £40m cost so far may be the tip of the iceberg.

PwC and KPMG have been brought in to resolve the issues, but one source suggested the cost of consultants and fixing the failing system could dwarf the current £40m bill – potentially doubling or more.

Strategic director of council management, Becky Hellard, who is responsible for the council's finance department, is absent from the council.

A spokesperson for the council said it was ‘not unusual' for IT systems to experience teething difficulties, but said this contract had been ‘particularly challenging'.

They added: ‘To resolve all issues, an action plan has been drawn up, governance strengthened and a new taskforce is being set up, which will be chaired by the chief executive [Deborah Cadman], with progress overseen directly by the leader of the council [Ian Ward]. 

‘In addition, the council is also actively engaging with its external auditors, who have offered to independently review the plans to ensure the implementation of the system is successfully complete.'

FINANCE

Expanded cities the winners in reorganisation plans

By Paul Marinko | 16 July 2026

The Government has backed expanded city authorities across the country with its announcement on local government reorganisation for remaining two tier areas.

FINANCE

The key to LGR success

By Jo Walker | 16 July 2026

Gloucestershire CC is calling for a comprehensive review of local government funding, greater local decision-making and a stronger partnership with central g...

FINANCE

Will Burnham be the hero in history?

By Michael Burton | 16 July 2026

Andy Burnham has the chance to offer hope and opportunity to a sullen population disillusioned with politicians and fed up with decline. He might want to see...

FINANCE

Casey's corrections for care

By Heather Jameson | 16 July 2026

Social care is no longer fit for purpose. Speaking after addressing the Local Government Association conference, Baroness Louise Casey tells Heather Jameson ...

Heather Jameson

Popular articles by Heather Jameson