A DAMNING report criticising Liverpool council’s flagship joint venture with BT will compound fears the local authority is being “ripped-off”, it was claimed last night.

The report, seen by the Daily Post, states the basis of billing for the £70m-a-year Liverpool Direct Ltd (LDL) deal is “opaque” and the “lack of transparency” has raised doubts about whether the council is getting value for money.

The Improvement and Development Agency for Local Government (IDeA), said high costs for benefits administration and rev- enue collection services “indicate that the spirit of the partnership is not working to the advantage of Liverpool City Council”.

The IDeA has told the council to carry out an immediate and ur-gent review of the contract, which runs until 2017, which could cost as much as £20m to end early.

Last night, the Labour oppo-sition said the information was “a devastating indictment of the Council's relationship with LDL” and would add to fears the council was being ripped-off. Council leader Warren Bradley said he had commissioned the report, and was not denying that the issue needed looking at.

But he insisted it also needed to be recognised that the work with BT on LDL had delivered huge service improvements and brought the council into the 21st century.

A council spokesman said the report raises a number of important issues which the council is addressing.

LDL was set up as a joint venture with BT in 2002 to im-prove the council’s customer services department. It has since expanded its remit into other areas of the authority including information technology, human resources, and revenues and benefits.

It was spearheaded by David McElhinney, who left his job as executive director of central services to become its full-time chief executive. There is no suggestion of any impropriety in the move.

Around 800 council staff have been seconded to LDL, which has left many confused about the terms of their contract.

Liverpool council chief exec-utive Colin Hilton and Cllr Peter Millea, executive member for assets and development, are directors of LDL with five directors from BT. Mr Hilton and Cllr Millea receive no pay-ment for sitting on the board.