It adds: “The council has submitted a proposal to LDL specifying the level and detail of financial management account information needed to verify that the value for money is being achieved.

“Although agreed in principle by LDL, this information has as yet not been provided.”

Labour deputy leader Cllr Paul Brant said he felt LDL was “playing hard ball with the council regarding this contract.”

He added: “ “The report raises serious questions about ‘fragmented change’ and a ‘lack of transparency’ from a Council perspective.

“We will ensure that these questions are fully explored as this is one of the significant contracts the Council has entered into in recent years.” On Friday, Cllr Bradley praised LDL on winning its awards.

He said: “It is well-deserved, everybody knows somebody who has been helped by Liverpool Direct, whether through the call centre or our One-Stop-Shops.”

LDL chief executive David McElhinney said the company would be presenting its own report to a scrutiny panel on Wednesday.

He added: “This is a council report and therefore we would not wish to comment on it. But there are on-going commercial negotiations in which issues are being discussed and resolved.”

Cllr Paul Twigger, who has taken over the corporate services portfolio, said one of his priorities was best value.

“It’s pointless pussy-footing around. We’ve got to be honest, accept mistakes have been made in the past, and solve them.”