BT CONTRACT A 'SHAMBLES' Councillor's anger at lack of profit for city.

Byline: DAVID BARTLETT 

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.

It also emerged the city council has spent more than pounds 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.

But the council cannot agree with BT on how much they are owed and it has now emerged nothing has 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 pounds 78m a year.

A council report also reveals LDL has failed to provide "timely and accurate financial management" infor mation.

Councillors have branded the situation 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" to 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".

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

Labour Cllr 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."

Mr McElhinney defended the firm's record and said: "We are not cheap as chips, but we are the best, and our people are the best."

Assistant executive director Ben Dolan said a proposal had been made to the city council about how profit share could work.

He said: "But our view is that it is not sufficient."