A critical Audit Commission report casting doubt on the success of Birmingham City council’s business transformation plan is based on out of date information and has been overtaken by events, it was claimed.
Deputy council leader Paul Tilsley said the study failed to take into account improvements delivered by the Voyager IT system which was now paying 97.5 per cent of bills within the Government’s recommended 30-day timescale – a significant improvement on the previous system.
When Voyager was installed last year by Service Birmingham, led by private outsourcing firm Capita, a backlog of more than 30,000 unpaid invoices quickly built up leading to fears that the multi-million pound savings promised as a result of business transformation might not be realised.
The Audit Commission report accused the council of being over-reliant on expensive private consultants and of having no idea how many jobs might be lost or created as a result of the transformation project.
But Coun Tilsley (Lib Dem Sheldon) told the cabinet yesterday that predicted cash-savings over the next 10 years now stood at £516 million.
“This will make a tremendous impact on the services we deliver. We should not forget that this Government is basically bankrupt and there is likely to be no new money for local services,” he added.
He agreed that business transformation involved the council taking risks, adding: “We went into this with our eyes open knowing that we would face enormous challenges. If we pull it off we will be so far down the road in local government business transformation that other local authorities and even governments will be queuing up to see what Birmingham is doing.”
He said the council had been forced to pay more than £75 million to hire consultants because it did not have staff with sufficient expertise to run the transformation programme, but that the number of consultants would be reduced over the coming months and years.
However, his confidence was not shared by Labour opposition leader Sir Albert Bore, who said the Audit Commission report showed that business transformation was not being handled well.
Sir Albert (Lab Ladywood) added; “We have paid Service Birmingham £75 million in consultancy costs which will be going to external operators through Capita. The Audit Commission pointed out, quite correctly, that there is a mismatch between external consultancy and expertise in the city council.”
Coun Bore challenged the cabinet to produce detailed reports showing how the cash savings would be made and the likely impact on jobs.
Council chief executive Stephen Hughes said the commission report underlined “the depth of our ambition” and also set out the risks attached.