West Sussex Oracle IT upgrade costs 20 times more than quoted

Implementation of a new business management system for payroll, human resources and finance was expected to cost £2.6m.

However, West Sussex County Council has now revealed the cost of upgrading to Oracle has swollen to almost £40million. 

West Sussex had made the initial decision to change its IT systems in 2019, awarding a five-year contract to Oracle Fusion in 2020. A number of ‘delays and difficulties’ were then encountered, and the original agreement was terminated in 2023.

Moving forward, the plan is now to begin a ‘refreshed programme’ to implement the cloud-based system, based on a principle of ‘adopt not adapt’. New suppliers will be needed for delivery, which could cost around £25million, bringing the total project price to almost £45million. The additional money will come from capital receipts, reducing borrowing needs, according to a spokesperson for the council. Different elements of the system are expected to go live from December 2025. 

The price hike echoes the experience of Birmingham City Council, which is currently under UK Government intervention following the filing of two section 114 notices in 2023, effectively declaring itself bankrupt. The authority switched to a flagship Oracle system, which it had prepared to spend close to £20million on.

However, once fully implemented, this could wind up costing almost £100million, with huge amounts spent on ‘resolving issues’ with the system following its rollout. While this had a hugely detrimental impact on the authority’s ability to close its accounts for the year 2022-23, equal pay claims are the biggest contributor to financial woes at the UK’s largest council. Overall, payouts for historic claims could reach £760million. 

In related news, the recently published PublicTechnology Local Government Digital Transformation Report found that just 37% of senior level local authority staff felt they were ‘very engaged’ in ‘digital matters’, dropping to 13% of councillors and 11% of frontline staff.