City to replace 4,000 out-of-date computers; Liverpool's pounds 70m IT deal with BT does not cover replacement of equipment: Labour attacks 'catalogue of failure' in key contract.

Byline: DAVID BARTLETT 

LIVERPOOL Council faces a massive bill to replace up to 4,000 out-of-date computers, despite spending more than pounds 70m a year on a controversial IT deal with BT.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 laptops - 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 pounds 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 pounds 78m-a-year. The city council has now spent more than pounds 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. The council has set up an inquiry panel to continue the investigation and get to the bottom of the deal. Liberal Democrat councillor Paul Clein said: "The report has highlighted some of the deficiencies, but it gives us an opportunity to make a step change in improving the quality of services. "We should not forget where we came from, because we are now light years ahead of where we were in 2001 when we were in the dark ages."

Cllr Hanson said the council faced the huge bill for computer replacement because it had not had a renewal clause in the contract with BT. Deputy Labour leader Paul Brant added: "The report reveals a catalogue of failure by the council to manage its biggest and most important contract. "Heaven knows how much the council has lost in money and opportunity by its neglect over the last eight years." A council spokesman said the report was intended to improve on progress made with BT. He said no personal data was stored on lap-tops or other removable devices.

He added: "There has been investment in the ICT infrastructure of the city council over the last decade through our partnership with LDL which has made it easier and simpler for people to get in touch with us and have their queries dealt with. "The ICT strategy outlines how we are going to build on the progress we have made, strengthen the contract management arrangements and make sure spending is linked to our aims and priorities." OPINION: PAGE 8

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Paul Brant Joe Hanson