Councillor Joe Anderson, Labour leader of the council, said, "It is unbelievable that a simple thing such as back-up has not been addressed. We are lucky nothing has happened, as it could have caused huge financial loss and embarrassment."
The risk was highlighted in a report from the district auditor. "In the event of a disaster at the datacentre, the council would not be able to instigate an acceptable back-up service," it said.
"There is no generator back-up for power outages and, in the event of a power failure, the emergency power system provides 30 minutes back-up."
The council, which set up Liverpool Direct, a joint technology venture with BT Global Services in 2001, has been forced to rush the roll-out of a £400,000 back-up system with BT. Work will start on 1 April, with completion due in 16 weeks.
A council spokesman said off-site back-up had not been addressed until the district auditor's report, because the first priority was to consolidate the authority's disparate IT systems, which includes 230 applications, 120 servers and 500 databases into one Oracle 8i database.
"When the joint venture was signed, IT at the council was in dire straits and the first priority was sorting out the different systems into one Oracle database," he said.
"We accept that [a back-up system] is something we need to do, but it is difficult to create a single datacentre and a back-up when you are doing all that."
BT said it had installed back-up data servers in 2002 but they are housed in the same building as the other IT systems.
"The first stage of the [disaster recovery] strategy was deployed in January 2002, the second stage is in progress with the implementation of a back-up site, which will provide further resilience and assurance," a spokesman said.