Thirty-five accounting, finance and local government experts have signed an open letter to local government minister Steve Reed, calling for a public inquiry into the bankruptcy of Birmingham City Council.
The open letter, which looks at the latest accounts from the council, notes that some of the figures used to “bankrupt” Birmingham City Council, including forecast levels of reserves and alleged equal pay liabilities, look like they have been materially misstated.
Since the failed implementation of an Oracle enterprise resource planning (ERP) system to replace SAP in April 2022, the council has faced significant issues with the processes and interfaces, as well as the system’s ability to produce reports. In effect, the council was unable to find out what money was being spent, what it was owed and how much it had received. Budget forecasting had to be carried out based on the best available data and organisational intelligence.
In April 2023, council leader John Cotton discussed the disastrous implementation of the ERP system, and in September 2023, the council issued a Section 114 bankruptcy notice.
Birmingham City Council’s Section 114 bankruptcy notice led to a rise in the council’s borrowing costs, an 18% rise in Council Tax bills, along with the ongoing bin strike dispute with Unite the Union. Significantly, the council has had to cut its budget and sell assets to help it reduce costs. The letter also states that there has been a steep rise in external audit fees and the significant costs charged by the city’s commissioners, who were appointed without the usual best value assessment.
In a post on X, James Brackley a lecturer in accounting at University of Glasgow, who prepared an analysis of the accounting at Birmingham City Council, wrote: “The latest analysis proves beyond doubt that Birmingham was never ‘bankrupt’ with the bankruptcy & subsequent intervention being based on imagined data as the authority underestimated its reserves and exaggerated its (non-existent) deficits by hundreds of millions of pounds. This has since led to the biggest program of cuts and asset sales any authority has ever faced.”
He added that the asset sales in 2024/25 against an underlying balanced position actually led to huge surpluses across all core reserves in the latest accounts.
Commenting on the post, Sharon Graham, general secretary of Unite, tweeted: “Government Commissioners, being paid £1200 a day, are not needed. Unite repeatedly advised the council that their figures were simply wrong, as was their legal advice. This is a disgraceful tale. Yet again, workers and residents are paying the price for a crisis and incompetence not of their making.”
Following the publication of a Grant Thornton report in February 2025, which looked at what went wrong with the implementation of the Oracle system, the council revised the implementation of Oracle to April 2026.
However, as of September 2025, it is believed that the income management system (IMS) at Birmingham City Council – a key application that needs to work with the Oracle system – is not fully working. Previously, the lack of a fully functioning IMS meant workarounds were needed for financial reporting.
