LIVERPOOL Council faces a massive bill to replace up to 4,000 out-of-date computers, despite spending more than £70m a year on a controversial IT deal with BT.

A council report on its IT systems also warns that the local authority does not encrypt its lap-tops – leaving them vulnerable to data loss if they were lost or stolen.

The report, which has been labelled a “catalogue of failure” by opposition councillors, also states that the council’s ageing computer stock is having a “significant impact on productivity”.

Between 2,000 and 4,000 computers do not meet minimum requirements and need to be replaced.

The council, which employs 10,000 people, last night refused to state how many computers it has, saying the information is “commercially confidential”.

Officials are yet to put a price on the huge replacement programme, but want to set up an investment fund to pay for the equipment over a three to five year period.

It comes as the council faces a potential shortfall of £120m over the next five years.

Last night, councillors hit out at the council for failing to include a rolling computer replacement programme in the Liverpool Direct Limited (LDL) IT and call handling deal with BT.

Labour councillor Joe Hanson said it was “just astonishing” that such a clause was not in the contract.

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 and costs £78m-a-year.

The city council has now spent more than £223,000 with consultants investigating the LDL contract for more than a year.

Last month, the Daily Post revealed how the local authority is yet to be paid a penny in profit from the flagship IT and call handling joint venture set up eight years ago.

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.