Birmingham's Oracle Fusion rebuild shows progress, but audit problems persist

Birmingham City Council, Europe's largest local authority, will spend at least three more financial years without auditors able to vouch for its accounts, despite finally reimplementing its Oracle Fusion-based HR and finance system.

Grant Thornton expects the council to receive disclaimer opinions for 2025/26, 2026/27 and 2027/28 because of problems with historic data. A disclaimer opinion means the auditor cannot obtain enough evidence to express an opinion on the financial statements. It does not mean the council failed to prepare accounts, but it leaves stakeholders without independent assurance that those accounts are reliable.

What the auditor's report says

A report from Grant Thornton said the council's transition to the rebuilt Oracle Fusion HR and finance system in August had been largely successful. “The reimplementation appears to have been better managed than the original 2022 implementation,” it said.

Ticket numbers support that view: there are no outstanding business-critical or priority level 1 or 2 issues on the new system. For context, the old Oracle system, known as 1B, carried 311 open tickets and two major incidents in September 2025.

What the project has cost the council

The first implementation left the council unable to reconcile its bank accounts or reliably understand its cash position, and contributed to the crisis that preceded its effective bankruptcy.

The total project, including the reimplementation, is set to cost around £144.4 million against an initial estimate of £20 million. Counting forgone efficiency savings, researchers have estimated the cost could reach £216 million. The council has spent more than £5 million on manual workarounds.

Why the accounting hangover continues

The council chose Oracle Fusion to replace its legacy SAP R/3 system. It initially planned to go live in December 2020 for finance and procurement and in February 2021 for HR and payroll, but a 2021 business case moved both launches to April 2022. Although the implementation was supposed to be out of the box, the council introduced several customizations, including a bank-reconciliation design that failed to work properly.

The council is therefore not expected to regain a clean audit opinion before 2028/29, roughly a decade after the Oracle programme began.