LIVERPOOL Council is yet to be paid a penny in profit from a flagship IT and call handling joint venture set up with BT eight years ago.

The Daily Post can today also reveal that the city council has now spent more than £223,000 with consultants investigating the Liverpool Direct Limited (LDL) contract for more than a year.

The city of Liverpool owns around 20% of LDL and was expected to make significant profits from large amounts of outside work the company has taken on since then.

But the council cannot agree with BT on how much they are owed, and it has now been revealed that nothing has actually been paid.

Councillors have criticised how LDL is held to account and BT and the council cannot even agree on how much investment the city has made in a contract which now costs taxpayers £78m a year.

A council report also reveals LDL has failed to provide “timely and accurate financial management” information, despite the fact the firm has agreed in principle to do so.

Councillors have angrily branded the situation as a “shambles” and criticised the council for getting into a contract which is “bulletproof” for LDL.

Labour leader Cllr Joe Anderson is demanding a “fundamental contractual review” which can take place every five years.

But officials are resisting this because they believe it would become a distraction.

It emerged at the council’s corporate services select committee that the chief executive of LDL, David McElhinney – once one of the city’s five executive directors – is still actually employed by the city council but seconded to BT.

Councillors have questioned the governance arrangements for the firm and the council has admitted they need “strengthening”.

Liverpool Direct Ltd was set up in 2001, to improve the council’s customer services department.

It has since expanded its remit into other areas of the authority.

The council launched a probe of the contract last year after a damning external report stated that bills for the LDL deal were “opaque” and “lacked transparency” – raising doubts about whether the council was getting value for money.

An update on that inquiry has now been reported to the select committee.

Labour councillor Joe Hanson said: “There are so many gaps, problems, and errors in the working with LDL for holding them to account – you could drive a bus through it.

“Why, when we signed this contract in 2001, have we left it until 2009 to do this?

“It is an embarrassing report to read.

“We got into an agreement but we don’t actually know what the agreement contains. Is that normally the way we do business?

“I am quite shocked by it. It is bulletproof for LDL.

“It’s taken so long to get to this report, people in positions of authority should be held to account over this.

“LDL are doing what they want to because they can and because we let them.”