Birmingham City Council’s SAP-to-Oracle project is set to cost £144.4 million – more than seven times earlier estimates – as it waits for a fully functioning system five years after its planned go-live date.

Keen readers will know the sorry saga of the ERP disaster at Europe’s largest local authority. For the uninitiated, highlights include going live with a system unfit to manage the council’s £3 billion in taxpayer revenue and multibillion-pound spending budget; a decision to turn off audits for fraud detection for more than 18 months; allocating £2 billion in transactions to the wrong year; and multiple delays and overspending.

Pertaining to the last item on this list of shame, Birmingham City Council has released new figures. In a written response published with its council meeting this week, officials said the total forecast cost of the program up to the 2027/28 financial year is £144.4 million, up from an initial estimate of £19 million with a £1 million contingency. In 2024, the total budget approved across financial years 2018/19 to 2025/26 was £131 million.

The project began in 2018, when the council planned to move away from its legacy R/3 SAP system to more modern software. Having picked Oracle Fusion, it initially planned to go live in December 2020 for finance and procurement, and in February 2021 for HR and payroll. According to a 2021 business case, this was re-planned with a revised launch in April 2022 for both functions.

Having hit the project milestone, things went from bad to worse. Although the council had planned to implement Oracle “out-of-the-box,” it created several customisations including a banking reconciliation system that failed to function properly. The council struggled to understand its cash position and was unable to produce auditable accounts. It has spent more than £5 million on manual workaround labour.

The Oracle implementation – along with poor management of equal pay cases – led to the council becoming effectively bankrupt in 2023.

The council has now bought a third-party solution to cover the banking reconciliation function, and is reimplementing Oracle from scratch, a project that was due to go live in April, and has now been delayed by several months.

The mushrooming cost of the project also needs to take into account the fact that schools have been removed from its scope, a move that might have led to reduced costs.

Nor does ballooning spending reflect how much the authority might be out of pocket in total. The initial project had banked expected savings in the millions from the 2022 go-live date. Anticipated savings of £69 million in 2023/24 were written off. In 2024, investigators put the total money lost at £216.5 million, which might climb by £10 million or so, given the new cost projection.

At around £225 million, the money lost equates to about £200 per person within the council’s boundaries.