Mayor Joe Anderson may have "attempted to stifle healthy competition" with his determination to award council contracts to local firms, the Max Caller report into Liverpool council has suggested.
The Best Value report into several departments of Liverpool Council followed concerns by Local Government Minister Robert Jenrick and Merseyside Police probe Operation Aloft.
In a section of the report dedicated to the council's Highways Department, Mr Caller's team outlined concerns with contracts being awarded without proper consideration of health and safety, environmental or planning rules.
Mayor Anderson, currently under investigation by Merseyside Police after his arrest on suspicion of bribery and witness intimidation offences, was described by Mr Caller as "insisting" on local firms.
The report states: "Overlying all of this was the Mayor’s insistence that his concept of social value was best achieved by employing contractors with a Liverpool postcode base.
"When contractors without that qualification won in competition this normally provoked a request for review.
"The documents reviewed record a complaint to the Mayor from a losing local contractor resulting in external consultants being called in to review the process. Their report revealed some minor irregularities but nothing worthy of intervention.
"However, the Mayor continued to express concerns. In fact, the central procurement process, if followed properly and followed up on with contractors after award does show how legally compliant social value can be delivered.
"The practice in Highways did not do this."
Elsewhere in the report, Mr Caller states despite the council claiming a "passion for delivering social value" - contracts and property deals failed to deliver.
He said: "The myopic view that suppliers of services to Liverpool City Council must have a Liverpool postcode, as stated in interview by the Mayor, demonstrates, at best, a lack of understanding of the Act and at worst, an attempt to stifle healthy competition in tender processes.
"The adverse effects of this approach are demonstrated in a number of cases examined."
Mayor Anderson has denied any wrongdoing and has stated he feels confident he will clear his name.
