Secret report over council’s financial records debated behind closed doors

Secret-report-over-council's-financial-records-debated-behind-closed-doors

Rhi Storer - Local Democracy Reporter | Wednesday 24th May 2023 10:50am

The council’s most senior financial officer has resigned over the scandal of spiralling costs behind a broken IT system, with sources claiming financial records will not be completed on time.

Such is the scale of embarrassment from the fallout, a special report into the IT system was debated behind closed doors, with one councillor demanding to know why Birmingham’s taxpayers’ were not allowed to hear the report.

Rebecca Hellard, strategic director of council management, resigned last week without an official statement from Birmingham city council. Ms Hellard had been absent from the council after it was revealed that the cost of an IT and HR contract have ballooned from £19 million to nearly £40 million.

Fiona Greenway replaces Ms Hellard as the council’s interim director of finance and section 151 officer – a statutory role responsible for looking after billions of pounds of the council’s budget.

A Birmingham city council spokesperson said: “We would not discuss matters relating to individual employees.”

Significant elements of the IT system continue to be delayed, with sources claiming the council is unaware who owes them money, and in some cases using credit cards to pay outstanding invoices.

In December 2020, the council switched to a new IT system, Oracle, to help improve its internal functions relating to financial management and human resources.

It is understood as many as 100,000 transactions from 2022-23 are not properly loaded, with another 2,000 new transactions a week going through the failing system.

While the council say they have made over £2.5 billion successful payments to suppliers, they admit the new IT system has “encountered difficulities” – with the council failing to pay schools and businesses on time.

The report said: “Whilst it is not unusual for the implementation of new IT systems to encounter difficulties, it is clear that the transition to Oracle has not run as smoothly as the council would have liked.

“Some elements of Oracle still require further work to function adequately and their failure to do so has impacted upon day-to-day operations in areas such as finance and HR.

“The council acknowledges that these issues have caused significant challenges for those schools that utilise the council services for finance and HR, and has apologised unreservedly.

But a source close to Birmingham city council’s finance department said the appointment of external expert was a case of “throwing good money after bad”.

“They were brought by management to show they were doing something about the problem, however no training or guidance was put in place for such staff. There are now a lot of newly created problems that stem from the lack of understanding that this team has on Birmingham city council.

“Existing BCC staff that have the knowledge and voice their concerns are being branded as troublemakers and being disinvited from meetings. It feels like working for an authoritarian regime. Everyone who dares to challenge is silenced one way or another.”

Conservative councillor Meirion Jones said: “The city solicitor forced [the report] into private session. I voted against private session, because the Labour group voted in favour.

“When we came to the end of the discussion, and this was probably two hours later, I asked what was it that we discussed that could not have been held in public and nobody could tell me. Everything that we discussed, would have been put into private session to avoid embarrassment.

“There was no information that was a commercially sensitive nature. The legislation is really clear. You can’t go into private session to prevent embarrassment. There has to be a solid commercial reason.

Councillor Jenkins said numerous scrutiny reports presented to councillors in the past showed the IT system to be working. “There were a few teething problems, but nothing to worry about. Right? Now, it’s clear that that wasn’t the case.

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