Equal Pay latest - Strengthening Governance and Organisational Capability and Capacity

Birmingham City Council has experienced recent, high-profile, instances of failure in terms of both the implementation of the Oracle ERP system and the unsustainable growth in its Equal Pay liability.

This is currently estimated at between £650m to £760m.

In response the Council’s Leadership intends to adopt the following measures to improve governance and strengthen organisational capacity.

The Council will strengthen its strategic capability and capacity by appointing three Strategic Expert Advisers to support the Council’s Directors and Cabinet in relation to the following areas (for further information see the notes section).

1. Industrial relations
2. Financial resilience
3. Risk management
4. Good governance, culture change and service Improvement
5. Digital and Strategic IT implementation

The Council will formally commission an independent Governance Review (in collaboration with the Department for Levelling-Up, Housing and Communities) this week, to focus upon areas including the Oracle implementation and Equal Pay.

Alongside the Governance Review the Council has commissioned an Independently Chaired, Internal Management Review to ascertain the root causes of the failure to effectively implement Oracle.

Given the scale of the potential liability relating to Equal Pay and the sums that have already been paid out in relation to this issue (in the region of £1bn) over the last 11 years, a judge-led inquiry will be commissioned to determine the causes of how the equal pay liability has continued to grow since 2012 and who is accountable. It is envisaged that the inquiry will begin in the Spring of 2024 pending the outcome of the Governance Review referred to above. 

In order to grip the Council’s financial position, mandatory spending restrictions will be implemented. Non-essential spending will cease with immediate effect.

Birmingham City Council leader Cllr John Cotton said: "I've been clear from day one that I will take whatever action is needed to address the substantial challenges facing the council and these measures are essential to grip the situation - particularly in terms of financial controls, organisational capacity and improved governance. We will be open and transparent throughout this process and the independent reviews and judge-led inquiry will ensure that there is proper accountability for these failings."

Birmingham City Council deputy leader Cllr Sharon Thompson added: "This is one of the biggest challenges this council has ever faced, and we must understand how the issues have arisen to prevent a repeat in the future. Given the scale of this challenge, we must impose mandatory spending restrictions. But as we have done throughout the cost-of-living crisis, we will continue to focus on tackling social injustice and inequality across our city. We will do everything we can to protect the services our residents rely on."