CITY executives have criticised the “weaknesses and lack of transparency” in the council’s arrangements with its IT and call-handling service, Liverpool Direct.

The partnership with LDL – set up as a joint venture with BT in 2001 to improve the council’s customer services department – now costs £78m a year.

It has since expanded its remit into other areas of the authority with the taxpayer retaining a 19.9% stake.

Critics argue LDL costs too much and its deal is too “opaque”.

A value for money appraisal is now under way.

Latest criticisms compound those made by external investigators in April.

But it came as the company last week won two awards – including “Best Company in the north of England” – and was praised by council leader Cllr Warren Bradley, who has recently joined the board of LDL.

He lauded the “real team effort involving all staff, suppliers, stakeholders and the management team”.

But that analysis is seemingly at odds with an officers’ report that there are currently situations in which LDL is failing to operate within the council’s own “employment procedures”.

As well as running the city’s benefits service, LDL is currently bidding for contracts to process other councils’ benefits and council tax claims.

The report adds: “In order for the council to be able to verify the ongoing value for money of the contract, lead the development of LDL services and to monitor performance against the contract, it needs to strengthen its role.”