Birmingham

Main article: UK

For 2023, the second largest city in Britain.

University

• University of Birmingham

Health care

• University Hospital Birmingham (UHB)

History

2023

Oracle's £100m failed IT project causes Birmingham bankruptcy

In early September 2023, it became known that one of the main reasons for the bankruptcy of Birmingham, the second largest city in Britain after, London was the failed IT implementation project. software Oracle

We are talking about an initiative called "Finance and People" (Financial and People). It provides for the transfer of Birmingham City Council infrastructure from the SAP ERP (Enterprise Resource Planning) platform to the Oracle Fusion solution. The project was announced in 2018: then it was said that approximately £20 million would be required for these purposes (approximately $24.5 million at the exchange rate as of September 13, 2023).

One of the main reasons for the bankruptcy of Birmingham, the second largest city in Britain after London, was the failed IT project to implement Oracle software

However, the transition to software of the American corporation Oracle was very delayed. Birmingham City Council was reviewing the plan in 2019, 2020 and 2021. And in May 2023, it was announced that the costs under this initiative could reach £100 (about $124.86 million), that is, increase fivefold compared to the original digital one. As a result, the city authorities were in financial difficulties, and a huge hole formed in the budget.

According to The Register, citing information received from knowledgeable individuals, Oracle Fusion's platform is not fully suitable for local authorities, as it is "largely focused on production/trading organizations." Therefore, costly improvements were required for state needs. In particular, Birmingham City Council pointed out difficulties in tracking financial transactions, as well as problems with HR management. The previous SAP ERP system was deeply optimized to meet the needs of authorities, and therefore it was necessary to recreate similar functionality in Oracle software, which caused difficulties.^[1]

City files for bankruptcy

On September 5, 2023, the authorities of Birmingham, the second largest city in Britain, actually declared bankruptcy of the metropolis. The city council declares that it is impossible to balance the budget, and all non-essential expenses are suspended.

The budget deficit was formed due to compensation in the case of violation of equal pay rules (lawsuits were filed by female employees), increased spending on fixing problems in the IT system and reducing government subsidies. In particular, wage claims require funds of up to £760 million (approximately $947 million at the exchange rate as of September 7, 2023). The cost of modernizing the information infrastructure is estimated at £100 million (approximately $125 million). In this regard, Birmingham City Council, which provides services to more than one million people, has issued a notice of termination of all spending, with the exception of the cost of essential services.

Birmingham

Obviously, the authorities faced unprecedented financial problems: from a huge increase in the cost of social benefits and a sharp reduction in income from entrepreneurial activity to extremely high inflation, said Deputy Chairman of the Council Sharon Thompson.

The city expects the budget deficit in the 2023-2024 fiscal year to be £87 million (about $108 million). Thompson partially blames the Conservative Party of Britain for the situation, due to which Birmingham allegedly lost funding in the amount of £1 billion (approximately $1.25 billion). A spokesman for British Prime Minister Rishi Sunak said local councils should manage their own budgets themselves.

While the council faces significant challenges, the city is still open for business and we welcome new entrepreneurs, Thompson added.[2]

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