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 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.”

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.”

“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.

“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 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.”

Earlier this week, Mark Stocks, Grant Thornton Midlands public sector assurance practice lead and co-author of the report, said that 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.”

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.