That’s the title of a new article by James Brackley, an accountancy expert at Sheffield University. He argues that the real cause of Birmingham Council’s huge Budget deficit and the cuts it is making is not the Equal Pay issue, it’s the Oracle IT fiasco. (Link 1)
Birmingham started using the Oracle system, which runs the Council’s accounts, in April 2022. (Link 2) Since then it has resulted in more than 70,000 transaction errors in collecting Council tax and business rates.
Brackley reports that the auditors stated on January 31 this year that: “No budget monitoring reports have been provided to Directorates during 2022-23 or 2023-24”. He quotes the chief financial officer who said on February 27 this year that “Reliance could not be placed on the most basic of financial information from the system, with Directorates unable to receive monitoring reports which reflected the true in-year financial position”.
Did the council jump before it was pushed?
Brackley argues that the Council leadership has chosen to place the blame as much as possible on the Equal Pay issue, with the aim of claiming that it is Trade Union leaders who bear the responsibility for forcing the Council to make the cuts. He suggests that if the Council had based the S114 notice on the Oracle issue it could have led the Government to underwrite the deficit and delay it till 2025-6, when “a new, nationwide funding settlement for local government would have been a real possibility”. This suggests, says Brackley, that “the council may have effectively jumped before it was pushed”.
Why did the Council’s Finance and Resources Overview and Scrutiny Committee keep silent?
The cause of the failure of Oracle doesn’t lie with the system but with how it has been operationalised by the Council. If so, the blame lies with the senior finance officers of the Council, and the Council leaders to whom they were responsible.
But blame also lies with the Council’s Finance and Resources Overview and Scrutiny Committee for its complete failure to hold the Council to account – which is supposed to be its role – over the development of the financial crisis in recent years. Where was its forensic examination, critique and proposals on the Oracle fiasco? Or the Equal Pay issue? It chose to keep silent until the news went public last summer. Why? Either they didn’t know about it, which is gross incompetence on their part, or they knew but chose to keep silent, which is a betrayal of the citizens of Birmingham.
Now the members of the Finance and Resources Overview and Scrutiny Committee should be held to account. They are Labour Councillors Alex Aitken, Raqeeb Aziz, Jack Deakin (who is the Committee Chair), Rashad Mahmood, and Hendrina Quinnen, Tory Councillors Meirion Jenkins and Ken Wood, and LibDem Councillor Paul Tilsley.
RH 10 March 2024
Link 1: James Brackley’s article is in The Conversation on 5 March. The Conversation is “the UK’s daily newsletter where you can read news analysis from academic experts. It is delivered every morning, Monday to Saturday, bringing you all our latest content written by academic researchers working with our team of professional editors. As a registered charity, free from interference from advertisers, politics, big business or billionaire owners, we focus on the facts, without fear or favour.” https://theconversation.com/how-birmingham-city-councils-equal-pay-bankruptcy-provided-cover-for-ongoing-oracle-it-disaster-224416
Link 2: Just some information about Oracle. Oracle designs, manufactures, and sells both software and hardware products and offers services such as financing, training, consulting, and hosting.
Larry Ellison is co-founder and executive chairman of Oracle. He owns 42.4% of the company. As of March 2024, he was listed as the eighth-wealthiest person in the world, with an estimated fortune of $130 billion.
On August 23, 2022, Oracle was hit with a class action lawsuit, which alleges that Oracle has been operating a “surveillance machine” which tracks in real-time and records indefinitely the personal information of hundreds of millions of people.
In February 2023, the company announced it was going to invest $1.5 billion in the Kingdom of Saudi Arabia as a part of the ongoing tech investment in the country.
Birmingham Against The Cuts 