UK Council Sells Assets To Fund Ballooning $50 Million Oracle Project

West Sussex County Council is using up to $31 million from the sale of capital assets to fund an Oracle-based transformation project, originally budgeted at $3.2 million but now expected to cost nearly $50 million due to delays and cost overruns. The project, intended to replace a 20-year-old SAP system with a SaaS-based HR and finance system, has faced multiple setbacks, renegotiated contracts, and a new systems integrator, with completion now pushed to December 2025. The Register reports: West Sussex County Council is taking advantage of the so-called 'flexible use of capital receipts scheme' introduced in 2016 by the UK government to allow councils to use money from the sale of assets such as land, offices, and housing to fund projects that result in ongoing revenue savings. An example of the asset disposals that might contribute to the project -- set to see the council move off a 20-year-old SAP system -- comes from the sale of a former fire station in Horley, advertised for $3.1 million.

Meanwhile, the delays to the project, which began in November 2019, forced the council to renegotiate its terms with Oracle, at a cost of $3 million. The council had expected the new SaaS-based HR and finance system to go live in 2021, and signed a five-year license agreement until June 2025. The plans to go live were put back to 2023, and in the spring of 2024 delayed again until December 2025. According to council documents published this week [PDF], it has 'approved the variation of the contract with Oracle Corporation UK Limited' to cover the period from June 2025 to June 2028 and an option to extend again to the period June 2028 to 2030. 'The total value of the proposed variation is $2.96 million if the full term of the extension periods are taken,' the council said.

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